M/S Shishu vs. State Of Chhattisgarh

Facts

The petitioner, M/s Shishu, through its proprietor Sarita Agrawal, filed a writ petition seeking a direction to respondents no. 2 (Director, Health Services) and 3 (Chief Medical and Health Officer, Mungeli) to decide their representation and release an amount of Rs. 49,33,300/- plus GST for goods supplied in 2022. The petitioner had submitted delivery challans and bills (Annexures P-2 and P-3) to respondent no. 3. Despite the supply and submission of bills, payment had not been received. The petitioner submitted a representation to respondent no. 2 on August 19, 2024, but no decision had been taken. The State counsel had no objection to a direction for consideration of the representation.

Held

The Court held that a writ petition is maintainable even if the source of the right claimed is initially in a contract, especially when challenging arbitrary and unlawful action by a public authority. Citing the Supreme Court's decision in ABL International Ltd. Vs. Export Credit Guarantee Corporation of India Ltd., the Court emphasized that when the State is a party to a contract, it has a legal obligation to act fairly, justly, and reasonably, as required by Article 14 of the Constitution. If the State's action contravenes these requirements, a writ court can issue suitable directions to rectify arbitrary actions. Consequently, the Court directed respondents no. 2 and 3 to decide the petitioner's representation (Annexure P-4 dated August 25, 2024) and claim in accordance with law, expeditiously, preferably within eight weeks from the receipt of the order. The Court did not decide the merits of the claim itself but focused on the procedural aspect of deciding the representation.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, can direct public authorities to decide representations and release payments arising from contractual obligations, particularly when the State is a party to the contract? (Question of law and mixed law and fact, concerning the scope of writ jurisdiction in contractual matters). Petitioner's contention: The petitioner argued that they had supplied goods as per a rate contract and submitted bills, but payment was unduly delayed. They sought a direction for the authorities to consider their pending representation and release the undisputed amount. Revenue/State's contention: The State counsel submitted that they had no objection to the limited prayer of directing the authorities to consider and decide the petitioner's representation in accordance with law, as the petitioner was not pressing the petition on merits.