Madras High CourtAdministrative and Public LawContract Law

Madras HC Sets Aside ₹94-Lakh Deposit Order In LED-Supply Dispute, Says Contractual Facts Cannot Be Tried In Writ Proceedings

District Rural Development Agency (DRDA)v.S .K .Sukumar

Madras HC Sets Aside ₹94-Lakh Deposit Order In LED-Supply Dispute, Says Contractual Facts Cannot Be Tried In Writ Proceedings. District Rural Development Agency (DRDA) vs S .K .Sukumar. Madras High Court. LawLens
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In brief

The question

Whether the writ petition was maintainable where the dispute arose from a contractual supply transaction and required determination of disputed facts concerning materials and payment.

The court held

The Court held that the writ petition was not maintainable for determination of the contractual dispute and set aside the Single Judge’s order directing deposit of Rs. 94,06,667.

It also directed

The appeal was allowed, with liberty to the first respondent to pursue a remedy in accordance with law.

If a civil suit is filed, the time spent in the writ proceedings and appeal is to be excluded in computing limitation, subject to the competent court’s consideration of the remaining limitation period.

No costs were awarded, and the connected miscellaneous petition was closed.

01Facts

The first respondent contracted with the appellants for the supply of LED lights and sourced them from the second respondent.

pp. 2–3 · ¶ 3, 6

After the first respondent allegedly failed to pay the second respondent, the latter filed O.S. No. 66 of 2019 against the first respondent, which remained pending.

pp. 2–3 · ¶ 3, 6

The first respondent then filed a writ petition seeking payment of amounts allegedly due under the contract, refund of earnest money, and return of bank guarantees.

p. 3 · ¶ 4

The Single Judge directed the appellants to deposit Rs. 94,06,667 to the credit of the civil suit. The appellants challenged that direction in this writ appeal.

p. 2 · ¶ 2

02Issues

i.Whether the writ petition was maintainable where the dispute arose from a contractual supply transaction and required determination of disputed facts concerning materials and payment.

pp. 3–5 · ¶ 5, 8

ii.Whether the Single Judge’s direction to deposit Rs. 94,06,667 to the credit of the pending civil suit warranted interference.

p. 2 · ¶ 2 · p. 5 · ¶ 9

03Law Applied

The Court applied the principle that proceedings under Article 226 of the Constitution of India are not an appropriate forum to determine contractual payment disputes requiring adjudication of disputed questions of fact; such disputes should be pursued before the competent civil court.

p. 5 · ¶ 8

The Court also directed that, if the first respondent filed a civil suit, the time spent prosecuting the writ petition and appeal be excluded when computing limitation, leaving the remaining limitation period for the competent court to assess on its merits and in accordance with law.

p. 5 · ¶ 10

Provisions in the judgment · 1

Letters Patent Section 15

04Reasoning

The claim arose from a contract for the supply of goods and involved alleged non-payment, with a related recovery suit already pending between the respondents.

pp. 4–5 · ¶ 6–8

The Court considered that deciding the amount payable would require resolving disputed facts and therefore was unsuitable for determination under Article 226.

pp. 4–5 · ¶ 6–8

It concluded that the first respondent should pursue the remedy before the competent civil court and that the Single Judge’s deposit direction could not stand.

p. 5 · ¶ 8–9

05Holding

The Court held that the writ petition was not maintainable for determination of the contractual dispute and set aside the Single Judge’s order directing deposit of Rs. 94,06,667.

p. 5 · ¶ 8–9

The appeal was allowed, with liberty to the first respondent to pursue a remedy in accordance with law.

p. 5 · ¶ 9–11

If a civil suit is filed, the time spent in the writ proceedings and appeal is to be excluded in computing limitation, subject to the competent court’s consideration of the remaining limitation period.

p. 5 · ¶ 9–11

No costs were awarded, and the connected miscellaneous petition was closed.

p. 6 · ¶ 11
Madras High Court

Original Court PDF

District Rural Development Agency (DRDA)vsS .K .Sukumar

Madras High Court · November 12, 2026

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