Contractors executing government work are entitled to payment based on the belief of proper authorization, and the State must act justly in fulfilling its contractual obligations.

JUDGMENT :

1. Petitioner has invoked writ jurisdiction of this Court, under Article 226 of the Constitution of India, for a mandate to the respondents, in particular respondents no. 3 and 5, for the release of admitted liability of Rs. 9.45 lacs on account of the execution of work, regarding construction of temporary bath rooms and allied works for Budha Amarnath Ji Yatra at Rajouri, along with interest @ 18 % per annum.

2. The case set out by the petitioner is that pursuant to the issuance of tender and acceptance of his bid by respondent no. 3, the work of construction of temporary bath rooms and allied works for Budha Amarnath Ji Yatra at Rajouri, came to be allotted in his favour vide allotment order no. EER/R&B/OG/2023-24 dated 25.09.2023. He executed and completed the allotted work to the satisfaction of the executing agency and raised bills amounting to Rs. 9.45 lacs, which came to be submitted by respondent no. 4 to the Executive Engineer, PWD (R&B) Division Rajouri-respondent no. 3 on 24.11.2023, after the completion certificate came to be issued in his favour by respondent no. 3 and signed by respondent no. 4. According to the petitioner, respondent no. 3, while admitting his liability submitted the bills to respondent no. 5 vide its communication no. 11196-97 dated 14.12.2023. He approached respondent no. 5 for release of the billed amount, who further admitted liability of the petitioner and produced a communication addressed to Director Urban Local Bodies, Jammu regarding release of funds against the allotted work. The grievance of the petitioner is that despite lapse of considerable time and representation made by him, his admitted liability has not been released in his favour and same has been withheld by the respondents without any lawful justification.

3. Heard arguments and perused the file.

4. Mr. Ravinder Gupta, learned counsel for respondents no. 1 to 4 has produced a Govt. Order No. 43-JK(HUD) of 2020 dated 04.02.2020, to contend that engineering wings of the Urban Local Bodies have been abolished and the execution of works came to be assigned to the Public Works (R&B) Department. According to Mr. Gupta, after the abolition of engineering wings of Urban Local Bodies, though all the payments/work done claims of the erstwhile Urban Local Bodies are being processed by Public Works (R&B) Divisions of the concerned Urban Local Bodies, however, the Finance Department has issued guidelines/modalities vide its circular dated 26.04.2021 for strict adherence by all the departments with respect to release of past liabilities and in case of any violation, action is required to be initiated against the erring officer. In essence, it is the stand of learned counsel for respondents no. 1 to 4 that admitted liability of the petitioner can be released only after release of funds by the concerned Urban Local Body and accord of sanction and administrative approval of the work.

5. It is by far a crystallized position of law now that it is not for the contractor, executing the work on behalf of the government or its agencies or Urban Local Bodies for that matter to consider whether Administrative approval, technical sanction and other legal formalities have been completed or not before undertaking a work, duly allotted in his favour by the competent authority. If a work duly sanctioned and allotted is executed and a completion certificate in this respect is issued in favour of a contractor, it is for the Government or the executing agency to explain that how work was executed in the absence of accord of approval and completion certificate is issued. A contractor who undertakes a particular work, after its due allotment, undertakes the same on the legitimate belief that the work is being undertaken by him after its due approval and completion of all the legal and codal formalities. Hon’ble Supreme Court in M/s Surya Construction v. The State of UP (Civil Appeal No. 2610/2010 dated 02.05.2010), has clearly ruled that State, while en