The court upheld the respondent's right to withhold payments due to the petitioner's failure to fulfill supply obligations, emphasizing that contractual disputes should be resolved through appropriate contractual remedies.

JUDGMENT :

1. Petitioner had initially filed OWP No. 584/2008, whose record got damaged due to devastating floods of September 2014 and its file had not been located/traced out as maximum record of the High Court was submerged in the flood waters due to unprecedented floods in the year 2014 and this Court while allowing Restoration Application (CM No.2337/2021) vide order dated 10.11.2021 had permitted the applicant to file fresh writ petition on the basis of cause of action which was the basis of filing OWP No.584/2008, with further observation that it shall not be available to the respondents to assail the maintainability of the writ petition on delay and laches from the year 2008 till filing of fresh petition. This is how the instant writ petition WP(C) No.2597/2021 came to be filed on the same facts and circumstances.

2. The petitioner, claiming to be the registered supplier of the J&K Health & Medical Education Department, supplying allopathic drugs and I.V. Fluids to the respondent-department for the last two decades asserted that the petitioner-company, was issued supply orders, pursuant to which various allopathic drugs and I.V. fluids including Injection Ampicilline 500/250mg, Tablet Paracetamol 500mg and other drugs were supplied, vide rate contract of the year 2004-05, pursuant to following supply orders:-

i) No. DHSK/PS/SO/Drugs/2004-05/1455-59; dated 21.02.2005;

ii) No. DHSK/PS/SO/Drugs/2005-06/1683-87; dated 07.01.2006;

iii) No. DHSK/PUR/SO/Drugs/2006-07/512-21; dated 08.09.2006;

iv) No. DHSK/PS/SO/Drugs/2006-07/870-74; dated 24.11.2006;

v) No. DHSK/PS/SO/Drugs/2006-07/1338-42; dated 05.02.2007.

3. The petitioner claimed that the petitioner-company had supplied the drugs and I.V fluids as mentioned in the above quoted supply orders to the respondents, under the terms and conditions of the contract within the stipulated period, however, the petitioner-company, due to some unavoidable circumstances, could not supply one crore fifty lac tablets of Paracetamol 500mg to the respondent-department; that the respondent- department released the bills of the supplied items of drugs and fluids in favour of the petitioner-company and also continued to issue supply orders in favour of the petitioner-company for years together.

4. It has been further pleaded that all the bills of the supplied items had been released by the respondents in favour of the petitioner- company except (i) bill No. 492 dated 01.03.2007 amounting to Rs.4,47,504/-, (ii) bill no. 511 dated 14.03.2007 amounting to Rs.7,97,722/-, (total amounting to Rs.12,45,226/-); that the petitioner, vide notice/communication dated 30.07.2007, requested respondent No.3 to release the amount of Rs.12,45,226/- on account of pending payment of aforesaid bills, however, respondents acknowledging the receipt of the notice on 30.07.2007 informed the petitioner-company vide communication No.DHSK/PUR/Halcyon/2007-08/702-06 dated 23.08.2007 that the payments were kept withheld because of the following facts:

"That this Office placed Supply Order issued under No. DHSK/PS/SO/drugs/2004-05/1445-59 dated 21-02-2005 and No. DHSK/PUR/SO/Drugs/2006-07/517-21 dated 08-09-2006 with your firm on approved rates of Central Purchase Committee, Health & Medical Education Department, J&K in your favor for the year 2004-05 vice rate ontract No. JMC/PS/Drugs/2855-64 dated 02-03-2005 for various Drugs and Medicines for the year 2004-05 and 2006-07 including one crore and fifty lakh Tablets of Paracetamol 500 mg each respectively;

Your firm failed to execute the Supply of the drug against both the supply Orders within stipulated period and this Office make alternate arrangement vide Supply Order No. Acctt/DHSK/2004-05-565- 68 dated 27-05-2005 and No. DHSK/PS/SO/Drugs/2006-07/98690 dated 27-11- 2006 favoring M/s Bengal Chemicals and Pharmaceuticals Ltd. (A Government of India Enterprise) New Delhi for which an amount of Rs. 11,77,220/- and Rs. 8,50,000/- (Total Rs. 20,27,200/-) have been paid extra by the Dep