Safiya Malik

The High Court of Jammu & Kashmir and Ladakh, Single Bench of Justice Wasim Sadiq Nargal, directed the Jal Shakti (PHE) Department to release admitted contractual dues of ₹7,71,224 to a proprietorship firm engaged for electrical and mechanical works between 2015 and 2020, holding that the State cannot delay payments to contractors for years and then discharge its obligation by paying only the principal amount without consequence or accountability. The Court held that once a contractor completes work pursuant to job orders issued by the government authority and liability is acknowledged through bill verification, the State is estopped from raising post-execution objections concerning e-tendering, administrative approval, or technical sanction to withhold legitimate payment — responsibilities that rested solely with the department prior to allotment of work.

The petitioner, a proprietorship firm engaged in electrical and mechanical works, filed a writ petition seeking release of ₹7,71,224 towards pending payments for works executed between 2015 and 2020 pursuant to job orders issued by the Jal Shakti (PHE) Department. The petitioner claimed that after successful execution of the allotted works in conformity with the terms and conditions, bills were raised and verified by the concerned Assistant Executive Engineer, acknowledging liability. Despite such verification, payment was not released.

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The respondents, in a compliance report, stated that pursuant to earlier directions of the Court, the claim was considered and rejected through a speaking order dated 25.11.2024 on the ground of lack of codal formalities, including e-tendering, administrative approval, and technical sanction as required under the Financial Code. The order of rejection was placed on record during the pendency of the petition. The dispute centered on whether admitted contractual dues could be withheld on grounds of absence of requisite approvals.

The Court observed, “The persons who execute the work on behalf of the respondents do so with a belief that all the codal formalities would be taken care of by the respondent-Authority and after the execution, they would be given their due payment with alacrity.” It further recorded, “The respondents, however, after getting the work done are denying the same to the petitioner on the pretext of codal formalities which has no connection with the petitioner.”

The Court noted, “Surprisingly, the same authority had issued job orders for the respective works in favour of the petitioner firm and subsequently once the work was completed by the petitioner well within the time in conformity with the terms and conditions of the job orders, the same authority i.e Executive Engineer (PHE) have taken a plea that there was no formal approval when admittedly there was approval of the competent authority.” It stated that the plea appeared to be “a matter of afterthought which is contrary to the record.”

Referring to settled legal principles, the Court recorded that “contractual payments must not be unduly delayed or withheld by the State without valid reasons.” It also noted from precedent that “Courts can exercise writ jurisdiction under Article 226 of the Constitution in cases where admitted contractual dues are withheld without justification.”

The Court held, “Each day’s delay in the release of payment must be justified. In the absence of such justification, the Government shall be liable to pay interest for the delayed period to the affected contractor/petitioner.” It added, “The principle of fairness demands that the State cannot have a ‘win-win’ situation, where it delays payment for years and still discharges only the principal amount, without any consequence or accountability.”

It further recorded, “The respondents cannot avoid their liability to pay by taking refuge in the absence of technical sanction and administrative approval, especially when the responsibility for obtaining such approvals rested solely with them.” The Court observed that the respondents, “having after admitted the liability, are estopped under law from questioning the contract at this belated stage.”

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The Court directed that “the instant writ petition is allowed and the respondents are directed to release the admitted liability to the tune of ₹7,71,224/- in favour of the petitioner within a period of four weeks from the date, a copy of this order as well as copy of the instant writ petition along with the annexures are made available to the said respondent. Failing which the petitioner will be entitled for the interest @6% from the date the said amount was due and not payable by the respondents. The instant writ petition is, accordingly, disposed of along with connected application(s).”

Advocates Representing the Parties:

For the Petitioners: Mr. Pawan Choudhary, Advocate
For the Respondents: Mrs. Monika Kohli, Sr. AAG

Case Title: M/s Krishna Engineering Works Industrial Estate Digiana, Jammu vs UT of J&K & Ors

Neutral Citation: 2026: JKLHC-JMU:208

Case Number: WP(C) No. 73/2024

Bench: Justice Wasim Sadiq Nargal