M/S NDN CONSTRUCTIONS vs THE STATE OF HP AND OTHERS

2026:HHC:37150
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
High Court of H.P.

CWP No.11119 of 2025
Date of Decision: 01.09.2026
____________ ___________________________________________
M/s NDN Constructions …….Petitioners


Versus


State of Himachal Pradesh & others … Respondents
_______________________________________________________

Coram:
Hon’ble Mr. Justice Sandeep Sharma, Judge.
1
Whether approved for reporting? Yes.

For the Petitioner: Mr. Suneet Goel, Senior Advocate with Mr.
Vivek Negi, Advocate.

For the Respondents : Mr. Rajan Kahol & Mr. Vishal Panwar,
Additional Advocate Generals with Mr. Ravi
Chauhan & Mr. Anish Banshtu, Deputy
Advocates General.

_______________________________________ _____________
Sandeep Sharma, Judge (oral):

Petitioner herein, which is a partnership concern enlisted
as a Class-A contractor with the Public Works Department, is
compelled to approach this Court in the instant proceedings filed
under Article 226 of the Constitution of India, praying therein to issue
directions to the respondents to pay its outstanding amount.
2. Though, vide order dated 11.07.2025, this Court had
directed the respondent-State to file reply, but fact remains that more
than one year has passed, but till date, neither the reply has been
filed nor the relief, as prayed for, has been granted to the petitioner

1
Whether the reporters of the local papers may be allowed to see the judgment?
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2026:HHC:37150
and as such, this Court has no option, but to decide the petition on the
High Court of H.P.
basis of the material already available on record.
3. Precisely, the facts of the case, as emerge from the
pleadings adduced on record by the respective parties, are that
petitioner, which is enlisted as a Class-A contractor with the Public
Works Department, was awarded work of construction of 08 No.
Type-II Quarters, 24 No. Type-III Quarters and 08 No. Type-IV
Quarters at Civil Hospital, Sundernagar, District Mandi, Himachal
Pradesh (SH. C/O 08 No. Type-II Quarters, 08 No. Type-III Quarters
and 08 No. Type-IV Quarters including WS & SI), vide award letter
dated 26.02.2021 for a total sum of Rs. 5, 55, 55,500/-. As per the
terms and conditions of the agreement executed inter se parties, the
stipulated time for completion of the work in question was 18 months
th
to be reckoned from the 15 day of the issuance of the Letter of
Award. The stipulated date of commencement of work was
13.03.2021 and the work was to be completed on 12.09.2022. At the
time of filing of the petition, the work was in progress, but the same
could not be completed for want of drawings, designs, and
instructions. Besides above, there was shortage of material to be
supplied by the respondents departmentally and permission was also
granted to the petitioner to purchase the material from the open
market during execution of the work, but fact remains that for want of
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funds, the work could not be completed. However, petitioner
High Court of H.P.
th
submitted as many as 11 running bills, but payment of 11 running
bill, which has been duly verified and passed for Rs. 64,58,414/-, has
not been made till date. Copy of approval of respondent No. 4 on the
th
11 running bill has been placed on record as Annexure P-4 .
4. Careful perusal of aforesaid communication clearly
reveals that gross amount payable to the petitioner was
Rs. 3,94,38,255/-, out of which Rs. 3,29,79,841/- stands paid, but as
th
of today, sum of Rs. 64,58,414/- is payable. Aforesaid 11 running
bill, out of which, substantial amount has been paid, was actually
prepared in the year 2024, but yet sum of Rs. 64,58,414 is payable.
5. Learned Senior counsel representing the petitioner
submits that once aforesaid amount is admitted, coupled with the fact
that respondent-department has no funds to proceed with the work,
this Court, while exercising power under Article 226 of Constitution of
India, can always direct the respondents to release the payment, so
that petitioner is saved from undue hardship. He states that petitioner
has raised loan, which is required to be repaid, but on account of
delay in payment, huge interest has accrued on loan amount, as a
result thereof, petitioner is facing acute financial distress.
6. Mr. Vishal Panwar, learned Additional Advocate General,
th
while fairly admitting factum with regard to preparation of 11 running
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2026:HHC:37150
bill, admits the amount, as is being claimed to be paid by the
High Court of H.P.
Department, but states that same could not be disbursed solely for
want of adequate funds. He states that the department has already
raised demand in the month of August, 2025, but till date, amount has
been not released, as a result thereof, department is finding it difficult
to clear the outstanding liability of the petitioner.
7. Though it is not in dispute inter se parties, that in terms of
agreement arrived inter se them, dispute if any, qua non payment of
bill is to be adjudicated by the arbitrator, if any, appointed with the
consent of parties or as per direction issued by the Court under
Section 11 of the Arbitration and Conciliation Act but once there is no
dispute qua the liability of the respondents and as of today,
Rs. 64,58,414 /- is payable to the petitioner, this Court sees no
impediment in considering the prayer of the petitioner, while
exercising power under Article 226 of the Constitution of India.
Aforesaid issue has already been settled by the Hon’ble Apex Court in
ABL International Ltd. Vs. Export Credit Guarantee Corpn. of
India Ltd. (2004) 3 SCC 5553, whereby Hon’ble Apex Court has
categorically held that merely because one of the parties to the
litigation raises a dispute in regard to the facts of the case, the Court
entertaining such petition under Article 226 of the Constitution is not
always bound to relegate the parties to a suit, rather, in writ petition, if
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the facts require, even oral evidence can be taken. Crux of the
High Court of H.P.
aforesaid judgment is that writ Court has jurisdiction to entertain writ
petition, where disputed questions of facts exist and there is no
absolute bar for entertaining writ petition if the same arises out of
contractual obligations or involves disputed question of facts.
Relevant paras of judgment supra, are reproduced herein:
“19. Therefore, it is clear from the above enunciation of law that
merely because one of the parties to the litigation raises a dispute in
regard to the facts of the case, the court entertaining such petition
under Article 226 of the Constitution is not always bound to relegate
the parties to a suit. In the above case of Smt. Gunwant Kaur
(supra), this Court even went to the extent of holding that in a writ
petition, if facts required, even oral evidence can be taken. This
clearly shows that in an appropriate case, the writ court has the
jurisdiction to entertain a writ petition involving disputed questions of
fact and there is no absolute bar for entertaining a writ petition even
if the same arises out of a contractual obligation and or involves
some disputed questions of fact.
27. From the above discussion of ours, following legal principles
emerge as to the maintainability of a writ petition :-
(a) In an appropriate case, a writ petition as against a State or an
instrumentality of a State arising out of a contractual obligation is
maintainable.
(b) Merely because some disputed questions of facts arise for
consideration, same cannot be a ground to refuse to entertain a
writ petition in all cases as a matter of rule.
(c) A writ petition involving a consequential relief of monetary
claim is also maintainable.”

8. In the aforesaid judgment, it has been categorically held
that in appropriate cases, a writ petition against State or
instrumentalities of State, arising out of contractual obligation is
maintainable even if some disputed questions of facts arise for
consideration.
9. Hon'ble Apex Court, while placing reliance on ABL
International supra, reiterated in Food Corporation of India v. SEIL
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Ltd. (2008) 3 SCC 440, that the matters involving public law
High Court of H.P.
elements, are amenable to writ jurisdiction. Relevant paras of the
aforesaid judgment are reproduced herein under:
“ 21. Jurisdiction of the High Court to entertain a writ application
involving contractual matter was considered by a Bench of this
Court in ABL International Ltd. & Anr. v. Export Credit Guarantee
Corporation of India Ltd. & Ors. [(2004) 3 SCC553] wherein upon
referring to a large number of decisions, it was held :
"23. It is clear from the above observations of this Court, once the
State or an instrumentality of the State is a party of the contract,
it has an obligation in law to act fairly, justly and reasonably
which is the requirement of Article 14 of the Constitution of India.
Therefore, if by the impugned repudiation of the claim of the
appellants the first respondent as an instrumentality of the State
has acted in contravention of the above said requirement of
Article 14, then we have no hesitation in holding that a writ court
can issue suitable directions to set right the arbitrary actions of
the first respondent.
22. Reliance placed by Mr. Sharan on M/s. Burmah Construction
Company v. The State of Orissa & Ors. [AIR 1962 SC 1320] is
not apposite. Claim made therein was a pure money claim. It was
in that situation observed that the High Court normally does not
entertain a petition under Article 226 of the Constitution to
enforce a civil liability arising out of a breach of contract to pay an
amount of money due to the claimant.
23. Article 14 of the Constitution of India has received a liberal
interpretation over the years. Its scope has also been expanded
by creative interpretation of the court. The law has developed in
this field to a great extent. In this case, no disputed question of
fact is involved. 24. The High Court, in an appropriate
case, may grant such relief to which the writ petitioner would be
entitled to in law as well as in equity.
25. We do not, thus, find any substance in the contention of Mr.
Sharan that while exercising its review jurisdiction, no interest on
the principal sum could have been directed to be granted by the
High Court. A writ court exercises its power of Review under
Article 226 of the Constitution of India itself. While exercising the
said jurisdiction, it not only acts as a court of law but also as a
court of equity. A clear error or omission on the part of the court
to consider a justifiable claim on its part would be subject to
review; amongst others on the principle of actus curiae neminem
gravabit (An act of the courts shall prejudice none). We
appreciate the manner in which the learned Judge accepted his
mistake and granted relief to the respondents.”
10. High court of Andhra Pradesh had an occasion to deal
with similar facts as exist in present case while rendering judgment
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dated 22.3.2022 in Writ Petition No. 2511 of 2022. In the said
High Court of H.P.
judgment, High Court of Andhra Pradesh held that when the State or
its instrumentalities failed to act legally within reasonable period to
make payment to the petitioner for the works executed by her and
infringed the fundamental rights of the petitioner, the Writ Court is
having jurisdiction to entertain the claim of the petitioner and as such,
this Writ Petition is maintainable. High Court of Andhra Pradesh, while
returning aforesaid finding also placed reliance upon judgment
rendered by Hon'ble Apex Court in ABL International supra. Relevant
para of the aforesaid judgment is reproduced herein below:
“13. This Court opine that when the State or its
instrumentalities failed to act legally within reasonable period to
make payment to the petitioner for the works executed by her
and infringed the fundamental rights of the petitioner, we hold
that the Writ Court is having jurisdiction to entertain the claim of
the petitioner and as such, this Writ Petition is maintainable.”

11. Leaving everything aside, once the liability to pay the
amount, sought to be released through instant petition, is admitted,
coupled with the fact that some amount had become due to the
petitioner in the year 2024, this Court sees no impediment in
exercising power under Article 226 of the Constitution of India,
thereby directing the respondent-department to pay the balance
amount to the tune of Rs. 64,58,414 to the petitioner expeditiously,
preferably within a period of three months, failing which, petitioner
would be entitled to interest at the rate of 6% per annum from the date
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of afore amount had actually become due to the petitioner. Ordered
High Court of H.P.
accordingly.
The writ petition stands disposed of in the aforesaid
terms, along with any pending application(s).

(Sandeep Sharma),
Judge
September 01,2026
(shankar)

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