M/S Tribeni Associate And Anr vs. The State Of Assam And 3 Ors

Held

The Court held that the petitioners are entitled to payment for the 80% of the contract work completed, amounting to Rs. 6,20,160/-. The Court noted that the State respondents did not dispute the completion of 80% of the contract work by the petitioners. The Court reasoned that the cancellation of the project and the listing of petitioners as non-starters pertained to the second component of the contract (maintenance for one year), which could not be performed due to the cancellation. The Court found that the completion report issued by the State respondents clearly indicated that 80% of the work was done. Therefore, the respondents are bound to pay the admitted contractual dues. The Court directed the respondents to make a proposal for sanction and payment of Rs. 6,20,160/- to the petitioners and to return the Earnest Money and Security Deposit if not already refunded. The entire exercise was to be concluded within three months. The issue of GST was not explicitly discussed or decided upon, as the dispute centered on the payment for work done.

Facts

The petitioners, M/s Tribeni Associate and its partner Md. Nurul Haque, filed a writ petition challenging the non-payment of an outstanding bill of Rs. 6,20,160/- and the non-refund of Earnest Money and Security Deposit. The dispute arose from a work order dated August 29, 2019, for "Protective Afforestation of Hahara Village under SOPD-G during 2019-2020." The contract was divided into two parts: afforestation work (80% of the contract) and maintenance for one year (20%). The petitioners claim to have completed the first part by the deadline of September 26, 2019, and obtained a completion certificate. However, the project was cancelled by the government on the same date, with the petitioners being listed as non-starters for the afforestation plantation scheme. The respondents acknowledged that 80% of the work was completed but cited the project cancellation.

Key Issues

1. Whether the petitioners are entitled to payment for the 80% of the contract work completed, despite the project being cancelled and the petitioners being listed as non-starters (turning on the principles of contract law and the doctrine of legitimate expectation)? 2. Whether the respondents are liable to refund the Earnest Money and Security Deposit submitted by the petitioners, considering the completion of a substantial part of the work? Contentions of the Petitioner: The petitioners argued that they had completed 80% of the contract work, which was verified and certified by the concerned authorities. They contended that the non-payment of the bill amount of Rs. 6,20,160/- was unjustified, as the cancellation of the project occurred after the completion of the first component of the work. They also sought the refund of their Earnest Money and Security Deposit. Contentions of the Revenue/State: The respondents, represented by the Soil Conservation Department, submitted that while 80% of the work was physically completed, the project was officially closed on September 26, 2019, and the petitioners were listed as non-starters. They relied on government decisions and letters indicating the cancellation of the project due to it being a non-starter. However, they also acknowledged that the petitioners had done some afforestation work.