M/S Jai Mata Di Construction Company vs. The State Of Bihar

Facts

M/s Jai Mata Di Construction Company (petitioner), a contractor, filed a writ petition seeking payment for work done under Agreement No. 38/MBD/2015-16, which involved construction and a five-year maintenance period for two roads. The petitioner claimed to have completed the work to the satisfaction of the Rural Works Department, Government of Bihar (respondents). Despite acknowledgments of completion in measurement books and departmental communications, outstanding dues, including claims for reduced work front, employer delays, maintenance, retention/security amounts, and interest, remained unpaid. The petitioner also sought payment of GST and the release of security deposit. The respondents stated that construction cost had been paid, but claimed the petitioner only performed three years of maintenance and had not raised GST claims. They also contended the security deposit was not payable as the five-year maintenance period was not complete.

Held

The Court found that the construction work was substantially completed and duly recorded by departmental authorities. While initial hindrances existed, subsequent completion of portions of the road, including the final 150 meters on 20.01.2020, was acknowledged. Departmental communications and completion certificates supported the fact of ultimate completion. The respondents admitted completion of the work and payment of construction cost. The dispute was confined to the remaining 150 meters and the consequential maintenance claim. The Court held that the petitioner is entitled to consideration and payment of maintenance amount for the period maintenance was actually carried out, in accordance with the agreement and recorded measurements. The actual date of completion of work must be strictly adhered to for computing the five-year maintenance period. The respondents were directed to verify records and make payment of admissible maintenance dues relating to the 150 meters after completion of the stipulated five-year period, within three months. The Court did not explicitly address the GST claim or the security deposit release, focusing primarily on the maintenance dues.

Key Issues

1. Whether the petitioner is entitled to payment for the entire five-year maintenance period as per the agreement, considering the respondents' assertion of only three years of actual maintenance being performed? (Question of mixed law and fact, turning on the interpretation of the agreement and the extent of work completed). 2. Whether the petitioner is entitled to claim GST on the work done, given the respondents' submission that no such claim was raised? 3. Whether the security deposit is payable to the petitioner at this stage, considering the respondents' argument that the five-year maintenance period has not been completed? Petitioner's arguments: The petitioner contended that the work was substantially completed and acknowledged by departmental authorities, and that their claims for maintenance, GST, and security deposit release were valid under the agreement and departmental records. They argued that the respondents' subsequent stance disputing these claims was contrary to earlier communications. Respondents' arguments: The respondents argued that the petitioner only performed three years of maintenance and had not raised any claim for GST. They also stated that the security deposit was not payable as the five-year maintenance period was not completed. However, they admitted that construction cost had been paid and steps were being taken for payment of maintenance dues for the three years actually executed.