An authority cannot deny payment for completed works by invoking its own procurement irregularities.

The petitioner sought quashing of the order dated 4 August 2025 and release of ₹4,37,565, being the alleged outstanding amount for works executed for the J&K Tourism Development Corporation, with interest at 12% per annum.

In an earlier petition, WP(C) No. 992/2025, the Court had directed the respondents to treat the petition as a representation and consider the petitioner’s claim in accordance with law.

Pursuant thereto, the respondents rejected the claim on the grounds that two works had been allotted directly on a “job order basis” without tendering, availability of funds, and other codal formalities, allegedly contrary to Rule 139 of the General Financial Rules, 2017, and the Finance Department circular dated 26 April 2021.

Although the total value of the works was ₹13,15,320 and ₹8,77,753 had already been paid, ₹4,37,565 remained unpaid.

The respondents admitted execution of the works, and the record produced before the Court demonstrated that the claimed amount remained outstanding.

Whether the respondents could deny payment for works admittedly executed merely because the works had been allotted without compliance with tendering and other codal formalities?

Whether the petitioner was entitled to release of the outstanding amount of ₹4,37,565 along with interest, notwithstanding the respondents’ reliance on Rule 139 of the General Financial Rules, 2017 and the Finance Department circular dated 26 April 2021?

The Court applied the principle that an authority which has allotted a contract, permitted the work to be completed, accepted its execution, and made substantial payment cannot subsequently rely solely on internal procedural irregularities or non-compliance with tendering requirements to deny the contractor the legitimate amount due.

The Court relied on Union Territory of J&K & Ors. v. Sanjeev Kumar, LPA No. 137/2020, decided on 23 February 2021, where the Division Bench held that a contractor who executed work pursuant to an allotment could not be expected to verify the authority’s internal compliance with territorial or tendering requirements, and that amounts due for completed work could not be denied on that basis.

Rule 139 of the General Financial Rules, 2017 and the Finance Department circular dated 26 April 2021 were relied upon by the respondents to challenge the validity of the allotment, but they did not displace the petitioner’s claim for payment for work admittedly completed and accepted.

The Court found that the respondents had admitted both the execution of the works and the outstanding amount of ₹4,37,565.

Applying the principle in Sanjeev Kumar, the Court held that the petitioner, having undertaken and completed the works pursuant to the respondents’ allotment, could not be deprived of payment because the respondents had failed to follow tendering or other codal procedures.

Those requirements governed the respondents’ internal administrative conduct and could not be invoked to defeat the contractor’s legitimate claim after the benefit of the completed works had been accepted.

The impugned order, which rejected payment solely on the basis of procedural non-compliance and the Finance Department circular, was therefore unsustainable.

The order dated 4 August 2025 was quashed, and the respondents were directed to release ₹4,37,565 to the petitioner.

The Court further awarded interest at 6% per annum, rather than the 12% claimed, from the date of filing of the present petition until payment.