Facts of the Case

The petitioner, M/s J.B. Enterprise, was issued various supply orders dated 10.07.2017 by the concerned Forest Department authorities for supply of materials including plastic mesh wire (Tuflex) of specified dimensions and binding G.I. wire.

The supply orders included:

  • Supply Order No. SP/GGP/SUPPLY ORDER/90;
  • Supply Order No. H/GGP/SUPPLY ORDER/38;
  • Supply Order No. SP/03/Plantation/90(A)-90(c); and
  • Supply Order No. SF/HR/68/GGP/45.

The petitioner claimed that the required materials had been supplied in accordance with the supply orders. However, the respondents allegedly failed to honour the bills submitted by the petitioner.

Aggrieved by the non-payment, the petitioner instituted the writ petition seeking a direction for disbursement of the contractor’s bill amounting to Rs. 21,87,357/-, together with interest as may be applicable.

The respondents, through the Divisional Forest Officer, Guwahati Social Forestry Division, filed an affidavit referring to a committee report. According to the stand taken in the affidavit, the works had been executed without obtaining technical sanction from the competent authority. It was also stated that verification had been conducted almost one year after execution and that there were instances of damage and theft, due to which exact verification could not be undertaken.

Issues Involved

The principal issues before the Court were:

  1. Whether the petitioner’s claim for unpaid contractor bills had been admitted or denied by the respondent authorities.
  2. Whether absence of technical sanction from the competent authority could constitute a valid reason for refusing payment where the supplies made pursuant to the supply orders were not denied.
  3. Whether delayed verification by the departmental authorities, conducted approximately one year later, could be used as a ground to refuse payment.
  4. Whether allegations relating to theft, damage or misplacement could justify non-payment when the actual supply orders concerned plastic mesh wire and binding G.I. wire.
  5. Whether the petitioner was entitled to consideration and payment of the admitted bill amount upon establishing issuance of the supply orders and actual supply of the ordered materials.

Petitioner’s Arguments

The petitioner contended that:

  • Valid supply orders had been issued by the concerned Forest Department authorities.
  • The materials required under those supply orders had actually been supplied.
  • Despite completion of the supplies, the respondents failed to honour the bills submitted by the petitioner.
  • The petitioner was therefore entitled to payment of the outstanding contractor’s bill amounting to Rs. 21,87,357/-, along with applicable interest.
  • The continued withholding of payment necessitated intervention by the High Court.

Respondent’s Arguments

The respondents relied upon the findings of a committee and contended, in substance, that:

  • The works had been executed without obtaining technical sanction from the competent authority.
  • Verification was carried out almost one year after execution.
  • There had been instances of damage and theft.
  • Due to the passage of time and the alleged damage or theft, exact verification could not be undertaken.
  • The committee had assessed expenditure and undertaken field verification on the basis of available circumstances.

Court Order / Findings

The Gauhati High Court found that the respondents’ affidavit did not amount to a denial of the petitioner’s claim. Rather, the respondents were refusing payment on the plea that technical sanction had not been obtained from the competent authorities.

The Court observed that where the petitioner had actually made supplies pursuant to the supply orders and verification was undertaken by the departmental authorities only after one year, such delayed verification was more in the nature of laches on the part of the department and could not be used as a reason for refusing to honour the contractor’s bills.

The Court further noticed that the respondents had referred to theft of saplings. However, the supply orders forming the subject matter of the petitioner’s claim related to plastic mesh wire of specified dimensions and binding G.I. wire. The Court found that such a stand appeared to be a misdirection by the authorities from the claim made by the petitioner.

The Court emphasized that the core fact remained that the supplies made by the petitioner were not denied by the respondents.

The Court held that the three grounds emerging from the respondents’ stand—

  • absence of technical sanction;
  • verification after one year; and
  • possible misplacement or theft of supplied articles—

were not acceptable reasons that could be construed as a non-admission by the Forest Department authorities of the petitioner’s contractor bill claim.

Final Direction of the Court

The Court directed the petitioner to submit an application before the Principal Chief Conservator, providing:

  • complete details of the supply orders;
  • details of the supplies made; and
  • any supporting material capable of substantiating that the ordered items had actually been supplied.

Upon receipt of such application, the Principal Chief Conservator was directed to:

  • provide the petitioner an opportunity of hearing;
  • allow the petitioner to produce materials substantiating issuance of the supply orders and actual supplies;
  • examine whether the supply orders were in fact issued and whether supplies were actually made; and
  • if such facts were established, pass orders for payment of all admitted bill amounts.

The Court directed that the required order be passed within two months from the date of submission of the petitioner’s application.

The writ petition was accordingly disposed of.

Important Clarification

The judgment is significant for the following clarification:

Where supplies pursuant to departmental supply orders are not denied, the department cannot treat its own internal or administrative deficiencies as an automatic justification for withholding payment.

In particular:

  • absence of technical sanction does not, by itself, constitute an acceptable ground for treating an otherwise undisputed supply claim as denied;
  • delayed verification by the department may amount to departmental laches and cannot automatically prejudice the supplier;
  • grounds relating to theft, damage or misplacement must have a rational and factual connection with the actual goods covered by the supply orders;
  • a departmental authority cannot misdirect itself by relying upon facts concerning different materials or items unrelated to the contractor’s actual claim; and
  • where issuance of supply orders and actual supply are established, orders for payment of admitted bill amounts are required to be considered and passed.

Section / Constitutional Provision Involved

Article 226 of the Constitution of India – Exercise of writ jurisdiction by the High Court in relation to non-payment of contractor’s bills where the respondent authorities’ stand did not amount to a genuine denial of the supply claim and the grounds advanced for withholding payment were found unacceptable.

Case Law / Precedent Position

No separate precedent or reported case law was cited or discussed in the judgment. The decision was rendered on the specific facts, pleadings, affidavit of the respondents, the nature of the supply orders and the Court’s finding that the supplies were not denied by the respondent authorities.

Accordingly, no unrelated judicial precedent has been added merely for SEO purposes, thereby preserving the accuracy and meaning of the judgment.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1783318603_1202compressed.pdf

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