State is Obligated to Discharge Admitted Contractual Liabilities for Completed Works Despite Budgetary Constraints

The Petitioner, a registered Class-I contractor, was allotted various contractual works by the Respondent Authorities (specifically Respondent No. 4) for construction and maintenance at CRPF camps in Kokrajhar District

The Petitioner completed the works within the stipulated time, and the CRPF authorities issued Work Completion Certificates

Subsequently, the Petitioner submitted bills totaling Rs. 3,44,38,166/-

Although the Respondent Authorities verified the bills and admitted the liability, they failed to release the payment, citing a lack of receipt of funds from the Government's Home & Political Department

Whether the Respondent Authorities are legally obligated to release the admitted outstanding dues to the Petitioner for completed contractual works despite the claimed non-receipt of funds from the State government

The court exercised its extraordinary jurisdiction under Article 226 of the Constitution of India to address the inaction of state instrumentalities in discharging admitted contractual liabilities

The court relied on the principle that once a state authority admits a debt for works completed without complaint, the plea of "non-receipt of funds" from the government is not a valid legal ground to indefinitely withhold payment to a contractor

The court examined the instruction issued by the Additional District Commissioner, Kokrajhar, dated 19.03.2026, which explicitly admitted that the Petitioner was entitled to Rs. 3,44,38,166/- for works related to Counter-Insurgency Operations

The court noted that while the proposal for fund release had been submitted to the Home & Political Department in July 2024, the payment remained pending solely due to administrative delays in fund allocation

By connecting the admitted liability (Facts) with the state’s obligation to act fairly and timely in contractual matters (Rule of Law), the court determined that the Petitioner’s right to receive payment for services rendered could not be subverted by internal departmental delays

The court ordered that this payment exercise must be completed within six months from the date a certified copy of the judgment is served upon Respondent Nos. 2 and 3

Any payments made during the pendency of the proceedings are to be set off against the final disbursal