Madras High Court
Contract LawAdministrative and Public Law

District Collector must consider the contractor’s payment claim and interest, taking the completion certificate into account.

M/S ARUN CONSTRUCTION AND CONTRACTOR vs THE DIRECTOR OF TOWN PANCHAYAT,

Madras High CourtJUDGMENT: September 29, 20262 MIN READSOURCE JUDGMENT
District Collector must consider the contractor’s payment claim and interest, taking the completion certificate into account.. M/S ARUN CONSTRUCTION AND CONTRACTOR vs THE DIRECTOR OF TOWN PANCHAYAT,. Madras High Court. LawLens
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The petitioner was engaged to deepen and strengthen minor irrigation tanks and lakes in Pennagaram Taluk under the Tamil Nadu Village Habitations Improvement Scheme-II.

Source reference: p. 3

It claimed to have completed the work and sought payment of ₹28,86,000 under a Letter of Acceptance dated 2 June 2017.

Source reference: p. 3

The petitioner relied on an online certificate from the Rural Development and Panchayat Raj Department indicating completion and entitlement to the stated amount.

Source reference: p. 4

It filed this petition under Article 226 seeking payment with 18% annual interest.

Source reference: p. 3

The State submitted that the claim would be considered after verification of the relevant documents.

Source reference: p. 4

The Court addressed the petitioner’s representation dated 1 November 2023.

Source reference: p. 5
02

Issues

Whether the petitioner was entitled to a direct direction for release of ₹28,86,000 for the works claimed to have been completed.

Source reference: pp. 3–5

Whether the petitioner was entitled to interest on the claimed amount, and what consideration of that claim was appropriate.

Source reference: pp. 3, 5
03

Law Applied

The petition was brought under Article 226 of the Constitution, which empowers the High Court to issue directions, orders or writs for enforcement of rights and for other purposes.

Source reference: p. 5

The order cites no specific statutory payment provision, legal precedent or substantive doctrine governing the contractual claim.

Source reference: p. 5

It directs the competent authority to consider the representation on its merits, in accordance with law, and to take account of the departmental online certificate; the interest claim is to be considered only if admissible in law.

Source reference: p. 5
04

Reasoning

The Court did not determine whether the petitioner had conclusively established its entitlement to the claimed sum.

Source reference: p. 4

The State had offered to verify the relevant documents and disburse any amount found due, while the petitioner had produced an online certificate indicating completion and entitlement.

Source reference: p. 4

In that context, the Court directed the second respondent to decide the petitioner’s representation on its merits, taking the certificate into account, rather than ordering immediate payment.

Source reference: p. 5

It similarly left the interest claim to the authority’s consideration under applicable law.

Source reference: p. 5
05

Holding

The writ petition was disposed of with a direction to the second respondent to consider the petitioner’s representation dated 1 November 2023 and pass appropriate orders in accordance with law, taking into account the online certificate, within two months of receiving a copy of the order.

The second respondent was also directed to consider the interest claim if admissible in law.

Source reference: p. 5

The connected miscellaneous petitions were closed, with no order as to costs.

Source reference: p. 5
Madras High Court

Original Court PDF

M/S ARUN CONSTRUCTION AND CONTRACTORvsTHE DIRECTOR OF TOWN PANCHAYAT,

Madras High Court · September 29, 2026

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