The State cannot withhold payment for admitted work-done liabilities on the plea of financial constraints.

The three petitioners, acting as members of the Elaquai Welfare Committee, executed developmental works at the Historic Trehgam Spring in District Kupwara under various government schemes (HEG, 13th Finance Commission, and MGNREGA) during 2018

The works were executed based on verbal directions from respondent No. 3 and administrative approval dated 10.10.2018

While Rs. 20 lakhs were released, a balance of Rs. 24.99 lakhs remained unpaid

Internal official communications dated 27.10.2021, 03.02.2022, and 24.02.2022, along with affidavits filed by the District Development Commissioner and Executive Engineer, expressly admitted the execution of work and the existence of the "work-done liability"

The petitioners approached the High Court seeking a writ of mandamus for the release of the admitted amount

1. Whether the State can withhold payment for works admittedly executed and enjoyed by the public on the grounds of non-availability of funds or procedural constraints

2. Whether the arbitrary withholding of admitted dues by the State violates the constitutional mandate of fairness under Articles 14 and 21 of the Constitution of India

The court applied the principle that State actions in contractual matters must satisfy the test of non-arbitrariness under Article 14 of the Constitution of India

State of U.P. v. Sudhir Kumar Singh (2021) to establish that a breach of natural justice by the State contains a "public law element" amenable to writ jurisdiction

The court further applied the "Model Litigant" doctrine and the principle of "Unjust Enrichment," asserting that the State cannot derive benefit from a citizen's work without compensation

Precedents from the same High Court, including M/s Saint Soldier Engineer and Contractor Pvt. Ltd v. UT of J&K (2025) and Bhat Traders v. UT of J&K (2026), were cited to affirm that paucity of funds or lack of administrative oversight are not valid defenses against admitted liabilities

The court reasoned that since the respondents filed affidavits categorically admitting the "work-done liabilities," no disputed questions of fact existed, thus making the case fit for Article 226 intervention

The court found that the State’s defense—citing procedural delays and fund shortages—was legally untenable because administrative approvals and budget allocations are internal prerequisites that must be satisfied before allotting work, not after its completion

The court emphasized that the petitioners had raised loans and incurred interest costs, making the State's delay a source of "severe financial hardship" and a violation of the right to livelihood

By utilizing the completed works for public benefit while refusing payment, the State’s conduct amounted to "unjust enrichment" and failed the constitutional standard of acting as a "model litigant"

The court directed the respondents to release the admitted liability of ₹24.99 lakhs to the petitioners within four weeks. It further ordered that should the respondents fail to comply within the stipulated period, they must pay interest at the rate of 6% per annum from the date the amount was due until realization