Eagle Enterprises In Consortium With Innovative Lighting Design LTD. vs. Chhattisgarh Tourism Board Ministry Of Tourism, Govt. Of Chhattisgarh

Facts

The Petitioner, Eagle Enterprises, entered into an agreement with Respondent No. 2, Telecommunications Consultants India Ltd. (TCIL), for the "Beautification and Illumination of Chitrakote Waterfall, Jagdalpur, Chhattisgarh and its Operation and Maintenance for three years." The project was awarded by Respondent No. 1, Chhattisgarh Tourism Board, to TCIL on a deposit work, turnkey basis. The Petitioner completed the project on September 15, 2023, to the satisfaction of TCIL. However, only ₹1.6 crores was released against the total contractual amount of ₹9,38,01,185/- (excluding GST). The Petitioner submitted a Final Bill of ₹10,85,64,701.26 (including GST) on December 28, 2024. TCIL stated that payment would be made only upon receipt of funds from Respondent No. 1, leading to the Petitioner filing a writ petition challenging the inaction and seeking takeover of the project and release of pending dues.

Held

The Court held that the dispute primarily arises from a contractual arrangement, and the Petitioner's grievance pertains to the enforcement of contractual obligations and the release of payment under agreed terms. Issues such as whether the Project was commissioned according to stipulations, if preconditions for payment were met, and the effect of the back-to-back payment clause require appreciation of evidence and are not suitable for adjudication in writ jurisdiction under Article 226, especially when disputed questions of fact are involved. The precedents relied upon by the Petitioner were distinguished as they involved admitted liabilities or unconditional acceptance of work without subsisting contractual impediments, unlike the present case where the claim is intertwined with specific contractual stipulations like the back-to-back payment clause and issues of certification and fund release. The Court found no material to indicate mala fide exercise of power or patent arbitrariness, noting that the payment is linked to inter se financial arrangements between public entities and governed by the contract. The Petitioner has an efficacious alternative remedy through the contractual dispute resolution mechanism. Therefore, the writ petition was dismissed as devoid of merit, without prejudice to the Petitioner availing other legal remedies.

Key Issues

1. Whether the inaction of the Respondents in taking over the completed Project and releasing the Petitioner's dues is arbitrary and violative of Article 14 of the Constitution of India, given that the Project was completed to their satisfaction? 2. Whether the continued failure to take over the Project and release payments imposes an unreasonable restriction on the Petitioner's fundamental right to carry on trade and business under Article 19(1)(g) of the Constitution of India? Petitioner's arguments: The Respondents' inaction is arbitrary and unreasonable, violating Article 14. Public authorities must act fairly. Deferring commissioning on the pretext of inter se financial arrangements defeats the public purpose and constitutes an abdication of duty. This causes financial hardship and operational prejudice, violating Article 19(1)(g). Relied on M/s Surya Constructions v. State of Uttar Pradesh & Others and Amjad Hossain v. The State of West Bengal & Ors. Respondents' arguments: There is no deliberate refusal or mala fide intention. Administrative and financial approvals are pending. Reconciliation of accounts and document verification are required. Administrative delay does not violate Articles 14 or 19(1)(g). The Petitioner's reliance on cases with admitted dues is misplaced as the quantum, certification, and approval are subject to scrutiny. The Petitioner has an efficacious alternative remedy through arbitration or civil proceedings.