Contractual disputes over final-bill deductions must be pursued before the statutory Arbitral Tribunal, not through writ jurisdiction.

The petitioner, a contractor, claimed payment of ₹7,45,525 as allegedly payable under his third and final bill for construction work undertaken for the Public Health Engineering Department, Government of Bihar.

The Engineer-in-Chief-cum-Special Secretary subsequently reduced the amount found payable to ₹2,29,434 after examining the completed work approximately six years later.

The petitioner relied on an earlier order dated 8 January 2015 in CWJC No. 19833 of 2014, whereby the High Court directed payment of admissible dues and observed that any dispute regarding deductions from the final bill or withholding of other amounts was to be pursued before the Arbitral Tribunal.

As payment was allegedly not made, the petitioner initiated MJC No. 1325 of 2016.

By order dated 27 August 2018, the contempt proceeding was disposed of with a direction to deposit ₹52,132 upon the petitioner furnishing the requisite information, while granting him liberty to challenge the rejection of his remaining claims.

Instead of approaching the Arbitral Tribunal, the petitioner filed the present writ petition challenging the reduction of his claim and seeking payment of the balance amount with interest.

Whether the writ petition was maintainable when the petitioner’s grievance concerned deductions and claims arising out of a works contract and the earlier High Court order directed him to approach the Arbitral Tribunal for such disputes?

Whether the petitioner was required to pursue his remaining monetary claims before the Bihar Public Works Contracts Disputes Arbitration Tribunal constituted under the Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008?

Whether the Arbitral Tribunal should consider the issue of limitation, particularly because the writ petition had been filed in 2019?

The Court applied the Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008, under which the Tribunal is constituted to adjudicate disputes relating to works contracts involving the State Government or a public undertaking.

Section 2(e) of the Act defines “dispute” broadly to mean any difference relating to a claim arising out of the execution or non-execution of the whole or part of a contract for works or services, including rescission of the contract.

The Court also applied the binding direction issued in CWJC No. 19833 of 2014 that any grievance concerning deductions from the final bill or withholding of amounts was to be pursued by enforcing the contract before the Arbitral Tribunal.

Accordingly, contractual monetary disputes falling within the statutory definition of “dispute” were required to be adjudicated by the designated Tribunal rather than through the present writ proceeding.

The petitioner’s challenge related directly to the reduction of the amount payable under his final bill and therefore constituted a dispute arising from execution of a works contract within Section 2(e) of the 2008 Act.

The Court held that the earlier order in CWJC No. 19833 of 2014 had specifically directed the petitioner to approach the Arbitral Tribunal for any grievance regarding deductions or withheld amounts.

Although the order in the contempt proceeding granted liberty to challenge the rejection of the remaining claims, that liberty did not alter the earlier direction regarding the appropriate contractual forum.

Since the petitioner had bypassed the statutory Tribunal and invoked writ jurisdiction in respect of the same contractual dispute, the writ petition was held not maintainable.

The Court nevertheless preserved the petitioner’s right to approach the Tribunal and directed that limitation be considered in view of the delay and the filing of the writ petition in 2019.

The writ petition was disposed of with liberty and direction to the petitioner to approach the Arbitral Tribunal within one month from receipt of the judgment.

The Tribunal was directed to decide the matter on merits within three months of the filing of the application, after granting the petitioner an opportunity of hearing, and to consider the question of limitation.

All interlocutory applications, if any, were also disposed of.