Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Ori) 3056

IN THE HIGH COURT OF ORISSA AT CUTTACK

WP(C) No.36306 of 2025

Sarat Kumar Samal …. Petitioner

Mr. Prabodha Chandra Nayak, Advocate

-versus-

State of Odisha and others …. Opposite Parties

Ms. Biswabara Dash, ASC

CORAM:

THE HON’BLE THE CHIEF JUSTICE

AND

THE HON’BLE MR. JUSTICE MURAHARI SRI RAMAN

08.04.2026

Advocates:
For the Appellants/Petitioners: Prabodha Chandra Nayak
For the Respondents: Biswabara Dash

A contractor cannot be denied contractual incentives for early project completion due to reporting delays caused by departmental authorities, as administrative bodies cannot benefit from their own internal procedural lapses or negligence to the detriment of the performer.

Headnote:(A) Constitution of India - Articles 226 and 227 - Writ jurisdiction for enforcement of contractual incentive claims - Early completion of infrastructure project - Interpretation of clauses regarding mandatory reporting of completion dates by official authorities. (Paras 1.2, 2)

(B) Contractual Obligations - Incentive for early completion - Contractor is not to be penalized for departmental failure - Authorities cannot rely on their own negligence or administrative delay in relaying information to deny benefits to a successful party. (Paras 5.2, 6, 7)

Facts of the case:
The petitioner successfully completed a construction project ahead of the stipulated deadline as per the contract agreement. While the field offices verified the completion date and recommended payment of the incentive, the department failed to process the incentive claim. The denial was based on procedural delays in the reporting of the completion date by the departmental engineers to the competent administrative authority within the timeframe mandated by the contract.

Findings of Court:
The court observed that the relevant contractual clause mandates the supervising engineer to report the completion date through specific modes of communication within seven days. It is not an obligation on the part of the contractor to enforce this submission. The court held that the delay in reporting was a result of departmental neglect and the contractor cannot be held responsible for the same.

Issues: Whether the failure of departmental authorities to report the completion of a project within the stipulated timeframe can be used to deny the contractor the entitled incentive for early completion.

Ratio Decidendi: Following the equitable principle that no authority can benefit from its own wrong or internal lapses, the court ruled that the contractor should not be penalized for administrative negligence. If the work is completed ahead of schedule, the right to claim the incentive vests with the contractor, and internal procedural failures by the department cannot invalidate such a claim. (Paras 5.2, 6, 7, 8)

Result: Writ petition allowed; the concerned authority is directed to process the incentive payment within two weeks.

Order No.

08.04.2026

01. 1. The petitioner being emerged successful in connection with the tender call notice dated 25th March, 2022 invited by the Chief Construction Engineer, Rural Works Circle, Balasore-opposite party no.3, an agreement bearing No.04/P-1 of 2022-23 has been executed on 4th June, 2022 indicating date of commencement of work as 4th June, 2022 with stipulation as to completion on 3rd May, 2023. The petitioner completed the work in all respect on 31st March, 2023, which was intimated to the Superintending Engineer, Rural Works Division, Jaleswar on 3rd May, 2023. By letter dated 4th April, 2023, the Superintending Engineer, Rural Works Division, Jaleswar communicated the fact of completion of work in all respect on 31st March, 2023, which is one month three days before the stipulated date of completion as per agreement to the Chief Construction Engineer, Rural Works Circle, Balasore.

1.1. The Chief Construction Engineer, Rural Works Circle, Balasore issued Letter No.3491, 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 10% of contract period (i.e. 1 month 3 days against 11 months) and thus eligible for incentive on early completion of project @ of 2% 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 shall as in duty bound every pray.”

2. As the document forming part of writ petition evince the aforesaid undisputed facts, it is felt necessary to dispose of the writ petition as keeping the matter pending would not subserve any fruitful purpose.

3. Learned Additional Standing Counsel having appeared for opposite parties, waives issue of notice as advance copy of the writ pet

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