Aman Agrawal vs. State Of Chhattisgarh

Facts

The petitioner, a registered contractor with the Public Works Department, was awarded a contract for construction work. The work was completed, and a Completion Certificate was issued, with the Defect Liability Period expiring. However, the respondents withheld an amount of Rs. 1,27,351/- for extra work and failed to release the Performance Bank Guarantee of Rs. 1,00,456/-. The petitioner submitted representations for the release of these amounts, totaling Rs. 2,27,807/-. Additionally, the respondents deducted Rs. 2,17,435/- towards extension of time charges, despite the Executive Engineer having approved the extension without penalty. The petitioner's representations were not responded to, and the withheld amounts were not released, leading to the filing of this writ petition seeking release of Rs. 4,55,242/- along with interest.

Held

The Court held that the dispute raised in the writ petition arises out of contractual obligations relating to the execution of works. While the petitioner asserted the amount claimed was undisputed, the respondents contended that payment release was contingent upon verification, budgetary allocation, sanction, and compliance with departmental and financial formalities. Therefore, the dispute involved factual aspects concerning work verification, liability determination, and procedural requirements for releasing public funds, which cannot be appropriately adjudicated in writ jurisdiction under Article 226. The Court reiterated the well-settled principle that in contractual matters, especially those involving disputed questions of fact or requiring appreciation of evidence, parties are ordinarily required to avail remedies under ordinary civil law. The extraordinary jurisdiction under Article 226 is discretionary and not meant for adjudicating pure contractual disputes or monetary claims unless clear arbitrariness, mala fide exercise of power, or violation of constitutional/statutory obligations is established. The Court found no material demonstrating arbitrariness or mala fides on the part of the respondents warranting interference. Consequently, the Court opined that the writ petition was not maintainable for adjudicating the claim and dismissed it, granting the petitioner liberty to avail remedies under law before the appropriate forum.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution, can adjudicate a dispute arising purely out of contractual obligations involving disputed questions of fact regarding work completion, quality, measurement, and verification, especially when alternative remedies are available? Petitioner's arguments: The petitioner contended that the work was completed to the satisfaction of the respondents, as evidenced by the Completion Certificate, and the Defect Liability Period had expired. They argued that the withholding of legitimate dues and the deduction of extension of time charges were arbitrary and violative of Article 14 of the Constitution. The petitioner also asserted that their representation was ignored, demonstrating arbitrariness. They relied on the principle that State instrumentalities must act fairly and reasonably. Respondents' arguments: The respondents argued that the dispute arose purely from contractual obligations and involved disputed questions of fact that are not amenable to writ jurisdiction. They contended that payment is subject to due verification, certification, and compliance with contractual conditions. The respondents further argued that writ jurisdiction is discretionary and should not be exercised in such cases unless clear arbitrariness or mala fide action is demonstrated, which they claimed was absent. They also stated that the extension of time approval by the Executive Engineer was recommendatory and subject to final approval.