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2026 Supreme(Online)(Ori) 2811

ORISSA HIGH COURT
Murahari Sri Raman, J
Sarat Kumar Samal – Appellant
Versus
State of Odisha – Respondent
WP(C) No.36241 of 2025



Advocates:
For the Appellants/Petitioners: Prabodha Chandra Nayak
For the Respondents: Sanjay Rath

Authorities cannot deny financial incentives for early contract completion by citing their own failure to meet mandatory internal reporting deadlines. The principle that no party can benefit from their own wrong prevents shifting the consequences of administrative negligence upon a diligent performing party.

Headnote:(A) Contract law - Public works - Incentive for early completion - Mandatory reporting requirements - Responsibility of the authority - Where a contract provides for incentives for early project completion, the burden of reporting completion within the stipulated time lies with the engineering department. (Para 4)

(B) Administrative law - Administrative negligence - A party cannot be permitted to profit from its own lapses or negligence - Failure of authorities to report project completion within the specified deadline does not negate the claim of a performer who has fulfilled all obligations diligently. (Para 6)

Facts of the case:
A contractor successfully finished a project well ahead of the agreed schedule. Although the engineering wings acknowledged the completion, the central administrative department failed to process the incentive claim. The refusal to pay was predicated on the argument that the mandatory internal reporting timeline was missed by the department.

Findings of Court:
The court found that the provisions governing the incentive do not require the performer to submit an application; rather, they obligate the administration to initiate reporting. Consequently, the delay caused by the authority's failure to perform its official duties cannot be used to penalize the performer.

Issues: Whether the incentive for early completion is forfeited by the performer if the authorities fail to adhere to the mandatory internal reporting timeline, and whether such failure constitutes a valid ground for denial of payment.

Ratio Decidendi: The court held that the principle of equitable justice prevents authorities from shifting the burden of their own administrative failures onto the performing party, particularly when the essential condition of early completion has been satisfied.

Result: The directive was issued for the administration to re-examine the incentive claim in light of the early completion, ensuring the performer is not penalized for departmental inaction.

Table of Content
1. establishing project completion facts and procedural standing for writ. (Para 3)
2. statutory interpretation of incentive eligibility based on timely reporting. (Para 4)
3. contractor not to suffer for bureaucratic reporting lapses. (Para 5)
4. authority cannot benefit from its own failure to process claims. (Para 6 , 7)

ORDER

01. 1. The petitioner being emerged successful in connection with the tender call notice dated 25th November, 2021 invited by the Chief Construction Engineer, Rural Works Circle, Balasore-opposite party no.3, an agreement bearing No.96/P-1 of 2021-22 has been executed on 29th December, 2021 indicating date of commencement of work as 29th December, 2021 with stipulation as to completion on 28th November, 2021. The petitioner completed the work in all respect on 24th June, 2022, which was intimated to the Superintending Engineer, Rural Works Division, Bhadrak on 28th June, 2022. By letter dated 29th June, 2022, the Superintending Engineer, Rural Works Division, Bhadrak communicated the fact of completion of work in all respect on 24th June, 2022, which is six month five days before the stipulated date of completion as per agreement to the Superintending Engineer, Rural Works Division, Bhadrak.

1.1. The Chief Construction Engineer, Rural Works Circle, Balasore issued Letter No.3435, dated 16th August, 2023 addressed to the Chief Engineer (Roads), Rural Works, Odisha, Bhubaneswar stating as follows:

“The work has been completed in all respect earlier before 30% of contract period (i.e. 6 month 5 days against 11 months) and thus eligible for incentive on early completion of project @ of 5% of contract value.

As such it is requested to consider the incentive proposal as per Clause 1.11 DTCN & Amendment 2016 Vol-I of O.P.W.D. This is for favour of kind information and necessary action.”

1.2. Despite such information given to the Chief Engineer (Roads), Rural Works, Odisha, Bhubaneswar, the petitioner being not accorded with the legitimate claim in terms of Clause 1.11 of the Detailed Tender Call Notice (DTCN) and Paragraph 3.5.5(V) of Note-III of OPWD Code (Volume-I) as amended by virtue of Office Memorandum File No.07556900032016-5288/W, dated 4th May, 2016 issued by the Government of Odisha in Works Department, the petitioner has come up before this Court by way of filing this writ petition invoking provisions under Articles 226 and 227 of the Constitution of India with the following prayer(s):

“It is, therefore, most humbly prayed that this Hon'ble Court may graciously be pleased to

I. Issue a writ in the nature of Mandamus in directing the Opp. Party No.2-Chief Engineer (Roads), Rural Works, Odisha to forthwith approve the petitioner's incentive dues under Clause 1.11 of the DTCN, strictly in terms of the recommendations of the Chief Construction Engineer, Opp. Party No.3 dated 16.08.2023 (Annexure 5) and the Superintending Engineer, Opp. Party No.4 dated 04.04.2023 (Annexure-4), and thereafter to ensure release of the incentive amount @ 2% of the contract value for the work Improvement Daxin Teghari High School PWD road to Bindhapadmapur-Talsari road via Ranibasan and Krushnanagar road under MMSY for the year 2021-22 within a time to be stipulated by this Hon’ble Court;

II. Issue direction to the Opposite Parties to pay interest 12% per annum (or at such rate as this Hon'ble Court deems just and proper) on the eligible incentive amount, from 31.03.2023 (the actual date of completion of work) till the date of actual payment;

III. The unexplained and prolonged delay in processing and approving the petitioner's incentive dues shall be declared arbitrary, unreasonable, mala fide in law and violative of Article 14 of the Constitution of India;

IV. Any other writ, order or direction may be issued as this Hon’ble Coat deems fit, just, equitable, proper and necessary in the facts and circumstances of the case.

V. And in this act of kindness, the petitioner

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