M/S Shree Nestbuild Infra PVT. LTD. vs. The State Of Bihar

Held

The Court allowed the writ petitions. Regarding the first issue, the Court found the termination of the contract dated 04.07.2025 to be illegal, arbitrary, and contrary to the terms of the agreement. The Court noted that the petitioner was compliant to the extent of almost 50% concerning drains, and there were no allegations regarding the maintenance of toilets or sludge treatment. The Court emphasized the importance of public health and hygiene, directing authorities to take necessary steps for treatment of drains and toilets. The termination letter was set aside. Regarding the second issue, the Court directed the authorities to pay the admitted dues to the petitioner for the work performed, totaling Rs. 68,23,64,700/- for sludge treatment and Rs. 1,96,94,69,915/- for drain treatment. The Court also directed the refund of wrongly encashed Bank Guarantees. While the contract period had expired, the petitioner was held entitled to compensation for the period they were prevented from executing the agreement and could make representations for extension.

Facts

The petitioner, M/s Shree Nestbuild Infra Pvt. Ltd., filed multiple writ petitions challenging the termination of contracts for bioremediation of drains and treatment of sludge from community toilets. The termination order, dated July 4, 2025, was issued by the Project Officer-cum-Additional Director, Urban Development and Housing Department, Government of Bihar. The petitioner argued that the termination was arbitrary, violated principles of natural justice, and was issued without considering their grounds. They also sought payment of admitted dues for work performed between August 2024 and June 2025, totaling significant amounts for both drain treatment and sludge management. The contracts were for bioremediation of drains flowing into rivers and treatment of sludge from community toilets.

Key Issues

1. Whether the termination of the contract bearing No. BGCMS/2023/NGT O.A. - 673/2018/46-324-09 dated 23.02.2024, by the Project Officer-cum-Additional Director, Urban Development and Housing Department, Government of Bihar, was illegal, arbitrary, and in violation of the principles of natural justice. The petitioner contended that the termination was passed without considering their submissions and that no opportunity for a personal hearing was provided. The respondents did not present arguments regarding this issue. 2. Whether the petitioner is entitled to payment of admitted dues for the work performed under the agreements dated 23.02.2024 and 09.04.2024 for the period August 2024 to June 2025. The petitioner argued that they had completed the work as per the contract terms and were entitled to the specified amounts. The respondents did not present arguments regarding this issue.