Shiv Ram vs. State Of Hp And Ors

Held

The Court held that a writ petition is maintainable against the State or its instrumentalities for enforcing a contractual monetary claim, especially when the liability is admitted and there is a delay in payment causing hardship. The Court relied on the Supreme Court judgments in ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. and Food Corporation of India v. SEIL Ltd., which established that writ courts can entertain such matters when public law elements are involved and the State acts unfairly or in contravention of Article 14. The Court noted that the respondents did not dispute their financial liability. Consequently, the Court directed the respondents to release the admitted outstanding amount of Rs. 31,85,601/- to the petitioner within two months. If the payment was not made within this period, the petitioner would be entitled to interest at the rate of 6% per annum from the date the amount became due. The petitioner was also granted liberty to pursue appropriate proceedings for any remaining payment as per the agreement.

Facts

The petitioner, Shiv Ram, an 'A' Class contractor, was awarded a construction work contract for a Government Senior Secondary School in Mandi, Himachal Pradesh, on March 12, 2024. While the first running bill payment was cleared, the second running bill payment of Rs. 82,14,168/-, approved in November 2014, remained unreleased, causing financial distress. Despite repeated requests, the respondent-department did not release the payment. The respondents acknowledged their financial liability. Subsequently, Rs. 74,00,000/- was released on August 10, 2026. However, a communication dated November 2, 2026, from the Executive Engineer indicated that Rs. 31,85,601/- was still pending and would be released upon receipt of funds from the client department (Education department). The petitioner sought a writ of mandamus for the release of the outstanding amount and interest.

Key Issues

1. Whether a writ petition is maintainable against the State or its instrumentalities for enforcing a contractual monetary claim, particularly when the liability is admitted and the delay in payment is causing financial hardship to the petitioner? (Article 226 of the Constitution of India). The petitioner argued that writ jurisdiction is maintainable in cases involving public law elements and where the State acts unfairly, citing ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. and Food Corporation of India v. SEIL Ltd. The petitioner contended that the admitted liability and the delay in payment infringed their fundamental rights, making the writ petition maintainable. The respondents did not explicitly argue against the maintainability of the writ petition on the grounds of contractual dispute, but rather focused on the procedural aspects of fund release.