M/S Purv Sainik Security Service vs. State Of U.P. And 4 Others

Held

The Court held that the writ petition is not only maintainable but also entertainable. On the first issue, the Court found that the respondents cannot withhold admitted contractual dues on the grounds of paucity of funds, financial constraints, or administrative difficulties. The Court reasoned that state instrumentalities cannot unjustly enrich themselves at the expense of citizens and that such pleas are untenable in law, citing the principle of unjust enrichment and the binding character of payment obligations once work is utilized. Regarding the second issue, the Court affirmed that a writ petition for admitted contractual dues is maintainable and entertainable, particularly when the liability is unequivocally admitted, referencing Supreme Court decisions that distinguish between maintainability and entertainability and outline exceptions to the rule of alternative remedy. The Court directed respondent No. 5 to liquidate the outstanding amount along with interest at the rate of 6% per annum within a maximum period of three months from the date of the order.

Facts

The petitioner, M/s Purv Sainik Security Service, filed a writ petition before the Allahabad High Court seeking payment of admitted contractual dues from the State of U.P. and other respondents. The respondents raised a preliminary objection regarding the maintainability and entertainability of the writ petition, arguing that the dispute was contractual in nature and an alternative remedy might be available. The petitioner's dues had remained unpaid for approximately five years. The court noted that the respondents had not disputed the liability for the services rendered by the petitioner.

Key Issues

1. Whether the respondents can withhold admitted contractual dues payable to the petitioner on grounds of paucity of funds, financial constraints, or administrative difficulties? (Question of law) 2. Whether a writ petition under Article 226 of the Constitution of India for the payment of admitted contractual dues is maintainable and, if so, when it becomes entertainable, despite the contractual nature of the dispute and the availability of an alternative remedy? (Question of mixed law and fact) Petitioner's arguments: The petitioner contended that the respondents cannot withhold admitted contractual dues on the grounds of financial constraints or administrative difficulties, as this would lead to unjust enrichment. They relied on various Supreme Court judgments emphasizing that state instrumentalities cannot evade financial obligations. The petitioner argued that the writ petition is maintainable and entertainable because the liability is admitted, and the exceptions to the alternative remedy rule, such as violation of principles of natural justice or illegality, are applicable. Respondents' arguments: The respondents raised a preliminary objection to the maintainability and entertainability of the writ petition, asserting that the subject matter relates to contractual dues and that a writ petition for such claims is generally not maintainable, especially when an alternative remedy exists.