{"id":358979,"date":"2025-09-04T14:30:53","date_gmt":"2025-09-04T09:00:53","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=358979"},"modified":"2025-09-06T10:55:28","modified_gmt":"2025-09-06T05:25:28","slug":"arbitrary-denial-of-payment-by-state-after-completion-of-work-arbitrary-jhar-hc","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/04\/arbitrary-denial-of-payment-by-state-after-completion-of-work-arbitrary-jhar-hc\/","title":{"rendered":"\u2018State\u2019s action arbitrary to deny payment on flimsy grounds after getting work completed for PM\u2019s Visit\u2019: Jharkhand HC orders payment of dues within 10 weeks to contractor"},"content":{"rendered":"
\n

Jharkhand High Court:<\/span> In a petition filed by a government-approved contractor based in Ranchi, the petitioner sought directions for the release of admitted dues that had been withheld by the authorities, despite the completion of work allotted in connection with the Prime Minister’s visit. The Division Bench of Rongon Mukhopadhyay and Deepak Roshan*<\/span>, JJ., while allowing the petition, observed that it was an arbitrary and unjust act on the part of the State to have the petitioner complete the assigned work and then deny payment on flimsy grounds.<\/p>\n

Further, the Court directed the respondents to pay the dues with interest of 6 percent p.a. to the petitioner from the date of completion of work till the date of payment within a period of ten weeks.<\/p>\n

Background<\/h3>\n

In the present case, for the visit of Prime Minister in April 2017, the petitioner was given the work of decorations, barricading, sound, lighting and arrangements for tent and German Hanger by the then Deputy Commissioner, Sahebganj. The issuance of work order was by nomination, and the petitioner was not aware about the process of allotment of work concerned.<\/p>\n

After successful completion of the work, the petitioner submitted its Bill to the Deputy Commissioner concerned for Rs. 8,63,23,117. Since the Bill remained unpaid, the petitioner wrote several reminders to the relevant authorities, but no response was received. In January 2022, the petitioner was issued a letter by the office of the Deputy Commissioner concerned, stating that an objection had been made by the Audit Team of the Planning Commission, Finance Department, Government of Jharkhand with respect to the payment to be made to the petitioner.<\/p>\n

The objection taken by the Audit Team was that the work had been allotted to the petitioner without inviting any tender and hence justification was being requested from the Deputy Commissioner concerned. In reply, he stated that the work was awarded to the petitioner considering its past work for a similar visit in another district since it was difficult to find experienced contractors in the said area and the time span of 11 days was not sufficient to float tender.<\/p>\n

Analysis and Decision<\/h3>\n

Considering that the Deputy Commissioner concerned had stated that the work was successfully completed by the petitioner and payment should be made to it, the Court opined that such a statement was in the nature of admission and when the authority which had allotted the work itself has admitted that the work was done successfully, withholding of payment was not justified.<\/p>\n

The Court observed that it was well-settled that even in contractual matters, the action of the State should be fair and free from arbitrariness. Therefore, the Court held that there was absolutely no reason as to why the dues of the petitioner should be withheld and the State could not deny making such payment in the guise of non-existent question of fact.<\/p>\n

Further, the Court opined that it was not the petitioner’s concern as to how the work was allotted to it as it had no responsibility for floating or non-floating of the tender and once it had been issued the work order, it is duty bound to complete the same. The Court held that It was arbitrary act on part of the respondents to get the work completed by the petitioner and then deny making payment on flimsy grounds.<\/p>\n

The Court allowed the petition and held that the reasons allotted by the Finance Department for non-payment of work done by the petitioner were not tenable. Further, the Court stated that both Departments of the Government of Jharkhand were at logger heads considering one was objecting to the payment, and one was in favour of making payment.<\/p>\n

The Court further directed the respondents to pay the dues with interest of 6 percent p.a. to the petitioner from the date of completion of work till the date of payment within a period of ten weeks.<\/p>\n

[Ajmani Infrastructure and Projects (P) Ltd. v. State of Jharkhand, 2025 SCC OnLine Jhar 3117<\/a>, decided on 25-8-2025<\/span>]<\/p>\n

*Judgment authored by: Justice Deepak Roshan<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Petitioner:<\/span> M. S. Mittal, Sr. Advocate and Salona Mittal, Advocate<\/p>\n

For the Respondents:<\/span> Sachin Kumar, AAG-II and Krishna Murari, Adv<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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