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IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU
WASIM SADIQ NARGAL, J.
Rehmatullah Naik, S/o. Haji Mohd. Shafi Naik – Petitioner
Versus
The U.T. of Jammu and Kashmir, Through its Commissioner/Secretary to Govt. to J&K, Public Works Department and Ors. – Respondents
WP(C) No. 1890 of 2023, CM No. 4389 of 2023
Decided On : 09-05-2024
Contractor - Release of Outstanding Admitted Liability - [Jammu and Kashmir Public Works Department Act, 1979, Section 3(1)(a); General Financial Rules] - The court directed the respondents to release the outstanding admitted liability amounting to Rs.20.74 lakhs in favor of the petitioner within six weeks. The court found that the petitioner had executed the work within the approved cost as per the supplementary agreement and was entitled to the balance amount. The court emphasized that the respondents cannot deny the petitioner's dues on flimsy grounds and ordered the release of the outstanding amount along with 9% interest if not paid within the stipulated time period.
Fact of the Case:
The petitioner, a registered A Class contractor, executed a road upgradation project and sought release of the outstanding admitted liability amounting to Rs.20.74 lakhs. The respondents rejected the claim, alleging violation of General Financial Rules.
Finding of the Court:
The court found that the petitioner had completed the work within the approved cost as per the supplementary agreement and was entitled to the balance amount. The court emphasized that the respondents cannot deny the petitioner's dues on flimsy grounds and ordered the release of the outstanding amount along with 9% interest if not paid within the stipulated time period.
Issues: The main issue was the failure of the respondents to release the admitted balance liability amount in favor of the petitioner. The respondents alleged violation of General Financial Rules and delay in raising the claim.
Ratio Decidendi: The court held that the petitioner had executed the work within the approved cost as per the supplementary agreement and was entitled to the balance amount. The court emphasized that the respondents cannot deny the petitioner's dues on flimsy grounds and ordered the release of the outstanding amount along with 9% interest if not paid within the stipulated time period.
Final Decision: The court directed the respondents to release a sum of Rs.20.74 lakhs in favor of the petitioner within six weeks. In case of non-payment within the stipulated time, the outstanding amount, along with interest at 9%, shall be payable to the petitioner by the respondents.
JUDGMENT :
Brief Facts :
1. The petitioner, through the medium of the instant writ petition has prayed for the following reliefs:
Quashing Govt. order No.215-PW(R&B) of 2022 dated 01.07.2022 issued by respondent no.1 where by the claim of the petitioner for release of admitted liability amounting to Rs.20.74 lacs has been rejected illegally arbitrarily and without any lawful justification.
Mandamus
(i) Commanding the respondents to release the outstanding admitted liability amounting to Rs. 20.74 lacs (Rupees Twenty Lac and Seventy Four Thousand only) in favour of the petitioner on account of work done with regard to work i.e. upgradation of Chacknarwah link road by way of providing and laying 25 mm thick SDBC (Semi Dense Bituminous Concrete) over 50 mm thick Bituminous Macadam under improvement of City/Town roads.
(ii) Commanding the respondents to pay interest @9% per annum on account of delay from the date the same is due as per the judgment passed by the Hon’ble Apex Court.
(iii) Any other benefit to which this Hon’ble Court deems the petitioner entitled to may also be granted in favour of petitioner in the circumstances of the case.”
2. The petitioner, through the medium of the instant petition is aggrieved of the order impugned bearing No.215-PW(R&B) of 2022 dated 01.07.2022, whereby the claim of the petitioner seeking release of the outstanding admitted liability amounting to Rs.20.74 lakhs, has been rejected. The petitioner claims to be a registered A Class contractor and participated in various e-tendering process issued by respondent no.4 for upgradation of Chacknarwah link road by way of providing and laying 25 mm thick SDBC (Semi Dense Bituminous Concrete) over 50 mm thick Bituminous Macadam under improvement of City/Town roads and the petitioner being the lowest tenderer vide allotment No.5574-78 dated 14.07.2016 was allotted the aforesaid work for allotted amount of Rs.29.62 lacs.
3. The specific case of the petitioner is that since the cost of the aforesaid contract was increased and, as such, the respondent no.4 submitted the case of the petitioner to respondent no.3 for entering into supplementary agreement with the petitioner to the extent of increased quantum and, accordingly, vide No. SED/R&B/6486-87 dated 30.08.2017 the respondent no.3 accorded approval to respondent no.4 for executing the supplementary agreement with the petitioner.
4. Accordingly, vide No.104 dated 09/2017 the supplementary agreement was executed and the cost of the work was fixed at Rs. 69.26 lacs instead of Rs.29.62 lacs.
5. The further case of the petitioner is that the petitioner has completed the aforesaid work satisfactorily within time and the respondent no.4 after verifying the work issued the requisite bill. As per the pleadings, it is apparently clear that a total amount which was claimed was Rs.69,65,589/-out of which Rs.48,92,000/-has already paid to the petitioner out of the revised enhanced liability. However, balance amount of Rs.20,73,589/-was not released till date in favour of the petitioner due to paucity of funds.
6. The petitioner was under a legitimate expectation that the outstanding liability amount to Rs.20,73,589/-will be released in his favour but despite the lapse of considerable time, the needful was not done by the respondents and the petitioner repeatedly approached the respondents seeking release of the balance amount.
7. The record further reveals that in pursuance to the representation filed by the petitioner, the respondent no.4 vide communication dated 03.08.2021 requested the respondent no.3 to release the funds to the tune of Rs.20.74 lacs with a view to enable the release of pending liability of the petitioner. Thus, the record reveals that the claim of the petitioner has been specifically admitted by the respondents in the aforesaid communication.
8. The petitioner has also submitted the work done claim to the tune of Rs.69.66 lacs, out of which, Rs.48.92 lacs has already been released a
The High Court has the jurisdiction to entertain a writ petition involving disputed questions of fact in contractual matters with the State and its instrumentalities.
State cannot withhold admitted dues for executed works from which it benefited, citing procedural lapses or paucity of funds; such arbitrary action violates Article 14, attracting writ jurisdiction u....
State cannot withhold admitted dues for executed and accepted public works citing paucity of funds or lack of privity among instrumentalities; violates Article 14, warrants interest on delay.
State and instrumentalities cannot withhold admitted dues for executed and accepted works on paucity of funds or privity pleas; violates Article 14; writ maintainable; interest payable for arbitrary ....
State and instrumentalities jointly liable for admitted dues on executed and accepted public works; cannot withhold payments citing no privity, paucity of funds or delays, violating Article 14; must ....
The Court determined that contractual disputes involving factual questions requiring evidence must be resolved outside the writ jurisdiction under Article 226 of the Constitution.
Delay and laches cannot be invoked by the government to deny an admitted claim for payment, emphasizing the need for timely compensation to contractors.
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