Jharkhand HC orders JUIDCO to clear Harmu River Project dues with 10% interest
SUMAN K SHRIVASTAVA Ranchi, July 15: In a significant ruling on recovery of admitted contractual dues from government agencies, the Jharkhand High…
SUMAN K SHRIVASTAVA
Ranchi, July 15: In a significant ruling on recovery of admitted contractual dues from government agencies, the Jharkhand High Court has directed the Jharkhand Urban Infrastructure Development Company Limited (JUIDCO) to release the pending payments of Eagle Infra India Ltd. arising out of the Harmu River Rejuvenation Project, holding that a writ petition under Article 226 of the Constitution is maintainable where the dues are admitted and the dispute is illusory.
Justice Ananda Sen passed the order on Wednesday while allowing a writ petition filed by Eagle Infra India Ltd., which was awarded the Harmu River rejuvenation project in 2015, including five years of operation and maintenance (O&M). The contractor contended that although the project and the O&M period had been completed, JUIDCO had failed to release the final running bill, O&M dues, payments for work carried out after expiry of the contract because the project was not taken over, and the performance bank guarantee.
Bank Guarantee Release Weighed Against JUIDCO
During the hearing, JUIDCO informed the Court that it had released the contractor’s performance bank guarantee a few days earlier. The Court treated this as a crucial admission, observing that JUIDCO had itself earlier maintained that the guarantee could be released only after satisfactory completion of all contractual obligations.
Justice Sen held that the voluntary release of the bank guarantee during the pendency of the case clearly indicated that the work had been completed to JUIDCO’s satisfaction, leaving little scope to subsequently question the quality of the work.
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Writ Maintainable for Admitted Contractual Dues
Rejecting JUIDCO’s objection that the dispute should be resolved through arbitration or a civil suit, the High Court relied on a series of Supreme Court judgments, including ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. and M/s Utkal Highways Engineers and Contractors, to reiterate that writ jurisdiction can be invoked to recover admitted contractual dues from the State or its instrumentalities.
The Court observed that while disputed contractual claims may sometimes require civil proceedings, there is no absolute bar on entertaining a writ petition where the claim is substantially admitted and does not require elaborate evidence.
Court Finds No Genuine Dispute
Justice Sen found that JUIDCO had repeatedly acknowledged completion of the project and the five-year O&M period. A communication issued by the agency itself stated that the final bill was under scrutiny and confirmed that the contractor had completed both the project and the stipulated maintenance period. The Court described JUIDCO’s objections regarding the quality of work as vague and unsupported by any documentary material.
The Court also rejected JUIDCO’s plea of limitation, noting that the O&M period ended on October 31, 2023, while the writ petition was filed well within three years thereafter. It further observed that JUIDCO itself had admitted that the project had not been taken over despite expiry of the contractual period.
Payment with Interest Ordered
Allowing the petition, the High Court directed JUIDCO to release the contractor’s pending Running Account (RA) Bill No. 29, outstanding O&M dues and payments for 16 months of maintenance work performed from November 1, 2023, until the filing of the writ petition because the project had not been taken over by the authorities.
The Court ordered that all outstanding amounts shall carry 10% annual interest from the date they became due until actual payment and directed JUIDCO to release the payments within 60 days of receiving a copy of the judgment.
