Departmental lapses cannot justify withholding contractual dues absent any proven default by the contractor.

The petitioner, a Class-II registered contractor, was awarded a contract for construction of a 2.70-km bypass road in Khagaria for an agreement value of ₹1,37,40,647. The agreement and work order were issued on 2 February 2011, with a stipulated completion period of twelve months.

The petitioner asserted that he completed the work within time; departmental measurements were recorded, a final bill of ₹13,67,134 was prepared, and ₹6,14,451 was retained as security deposit. Substantial payment of ₹1,22,89,020 had already been made, and completion and experience certificates were issued.

The petitioner’s earlier writ petition was disposed of on 22 September 2017 with a direction to the District Magistrate, Khagaria, to examine the claim and release the admitted dues, or, if the claim was disputed, to pass a reasoned order after hearing the petitioner. The admitted amount was directed to carry simple interest at 5% per annum.

After hearing the petitioner, the District Magistrate rejected the claim on grounds relating to deficiencies in the estimate, Measurement Book, technical approval, supervision, and the condition of the road. The petitioner challenged that rejection in the present writ petition.

Whether the District Magistrate validly rejected the petitioner’s claim for the final bill and refund of the security deposit on the basis of procedural, technical, and administrative deficiencies allegedly attributable to departmental officials.

Whether the petitioner was entitled to consideration and release of the amount due under the final bill and security deposit, with interest in accordance with the earlier order of the Court.

The Court applied the principle that payment for work executed under a valid government contract cannot be withheld merely because of procedural, technical, or administrative lapses committed by departmental authorities, particularly where the execution of the work, departmental measurements, preparation of the final bill, and substantial prior payment are not disputed.

It further applied the binding direction issued in the petitioner’s earlier writ petition, requiring the competent authority either to release the admitted dues or, after notice and hearing, to pass a reasoned order determining the petitioner’s entitlement; the admitted amount was to carry simple interest at 5% per annum.

The petitioner’s entitlement was to be determined in accordance with the departmental records and the terms of the agreement.

The Court found that the contract had been duly executed, the work had been completed, substantial payment had been made, and a final bill had been prepared after departmental measurement.

Although the District Magistrate referred to the absence of prescribed supervision, irregularities in verification of the Measurement Book, deficiencies in the estimate, and concerns regarding the road, the impugned order did not record any specific finding that the petitioner had failed to execute the work in accordance with the agreement, that the final measurements or bill were incorrect, or that the petitioner had committed a contractual breach.

Since the deficiencies substantially concerned departmental supervision, record-keeping, and technical procedure, they could not, by themselves, justify denying payment for work executed by the petitioner.

The rejection order therefore failed to properly determine the petitioner’s entitlement to the admitted dues in terms of the earlier judicial direction.

The District Magistrate’s order dated 15 December 2017, communicated through Memo No. 1792 dated 31 December 2017, was quashed.

The petitioner was held entitled to consideration and release of the amount found due towards the final bill and security deposit in accordance with the departmental records and the agreement. The admitted amount was to carry simple interest at 5% per annum, as directed in the earlier writ proceedings.