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MADHYA PRADESH HIGH COURT
Sheel Nagu and Rajeev Kumar Dubey, JJ.
Smart Chip(P) Ltd. —Petitioner
versus
State of M.P. and Ors. —Respondents
W.P. No.8177 of 2015
Decided on 16.12.2016

Counsel for the Parties:
For the Petitioner:Shri D.K. Singh, Advocate assisted by Shri Saurabh Agrawal, Advocate, Shri Rajesh Prajapati, and Shri Sangam Jain, Advocates
For the Respondent No.1 and 2:Shri Vishal Mishra, Addl. Advocate General
For the Respondent No.3:Shri Arvind Dudawat, Advocate

Headnote:Constitution of India – Article 226 – Contractual matter – Court should not interfere in contractual matter under Article 226 – However, instantly, issue not concerning breach of any terms of the contract – Dispute pertaining to delay in making payment – Delay may be for reasons beyond control of the State – Held, State may have been negligent, procrastinative or inadvertent but not arbitrary – No interference warranted under article 226 – Remedy can be sought under the agreement. (Para 7, 8)

       (2015) 7 SCC 728 – Referred

       Result: Interference declined.

JUDGMENT

Rajeev Kumar Dubey, J.—The instant petition under Article 226 of the Constitution of India prays for the following reliefs:

In view of the facts and circumstances mentioned hereinabove, this Hon’ble Court may graciously be pleased to:

A. Issue an ad interim order/direction in the nature of mandamus, commanding the respondent no.3, third party agency, under the contract dated 27.09.2013 to complete the quantitative verification of pending monthly invoices raised by the petitioner and received from the office of the Transport Commissioner, for the work done, within 10 days and send the communication to the Transport Department of completion of such verification; and

B. Issue an ad interim order/direction in the nature of mandamus commanding the respondent no.3, to complete the quantitative verification of monthly invoices within 10 days after their receipt in the future so as the work under the contract, is not hampered and the public delivery system is not affected in absence of timely payment for the work done; and/or

C. To issue any other or further writ, order or direction which this Hon’ble Court may deem fit and proper on the facts and circumstances. Learned counsel for the rival parties are heard.

2. The petitioner is a private limited company registered under the Companies Act which has been awarded the contract for computerization of Transport Department vide RFP for which agreement dated 27.09.2013 was entered into between the petitioner and the Government of Madhya Pradesh, Department of Transport.

3. The sole grievance of the petitioner as projected by the learned counsel is that the agreement in question lays down certain terms of payment in Clause 10.24 which are not being adhered to by the respondents. In this factual background, learned counsel submits that since the contract entered into between the petitioner and respondents relates to the field of public law, a writ deserves to be issued to the respondents to comply with the time schedule for payment as contained in the said clause to prevent hindrance in execution of contract by the petitioner which is in public interest.

4. Learned counsel for the petitioner has placed reliance on number of decisions of the Apex Court and also of the High Court in support of various contentions raised by the petitioner to emphasize the distinction between private and public law in the field of contract, literal construction of the terms of contract, amenability of contractual matters to writ jurisdiction and the concept of legitimate expectations and promissory estoppel in cases of K.N Guruswamy Vs. State of Mysore, DFO Vs. Ram Sanehi Singh, ABL International Ltd. Vs. Export Credit Guarantee Corpn of India Ltd., Joshi Technologies International Inc. Vs. Union of India, Rajasthan State Industrial Development & Investment Corpn. Vs. Diamond & Gem Development Corpn, DLF Universal Ltd & Anr Vs. Director, Town & Country Planning Department & Ors, Navjyoti Coop. Group Housing Society Vs. Union of India , Food Corpn of India Vs. Kamdhenu Cattle Feed Industries, Kasinka Trading Vs. Union of India reported in AIR 1954 SC 592, (1971) 3 SCC 864, (2004) 3 SCC 553, (2015) 7 SCC 728, (2013) 5 SCC 470, (2010) 14 SCC 1, (1992) 4 SCC 477, (1993) 1 SCC 71, (1995) 1 SCC 274.

5. Per contra, the State in its short return filed on 29.08.2016 responding to the contentions of petitioner submits that the payment upto March/April, 2016 to the tune of Rs. 3,42,35,372 has been made vide order dated 20.07.2016 Annexure R-1.Whereas, the bill pertaining to the month of May,2016 are pending considering and shall be cleared shortly as soon as the verification report is received from the respondent no.3. It is further disclosed in the reply that bill for the month of January,2016 has not been submitted by the petitioner yet and it is assured by the State that as soon as bill pertaining to the month of January,2016 is received, the same shall be cleared as expeditiously as possible after conduction of



























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