In a scathing judgment, the Jammu & Kashmir High Court criticized the Union Territory (UT) administration for failing to release payments due to a contractor, Mr. Mohammad Afzal Reshi, for over nine years. The Division Bench, comprising Justice Atul Sreedharan and Justice Mohd Yousuf Wani, dismissed the appeal (LPA No. 121/2023) filed by the Union Territory of Jammu & Kashmir against the order of the Single Judge, which directed the government to clear the contractor’s dues along with interest.
Background of the Case:
The case revolves around civil works executed by Mohammad Afzal Reshi in 2015 for the Wullar Manasbal Development Authority, under a tender allotted by the Tourism Department of the Union Territory. The original contract amount was ₹26.07 lakhs. However, the scope of the work increased as Mr. Reshi was instructed to carry out additional work, raising the total due amount to ₹42.97 lakhs. Despite completing the work to the satisfaction of the authorities, the government released only ₹12 lakhs, leaving a balance of ₹29.7 lakhs, which was subsequently reduced to ₹20.97 lakhs after partial payments.
Legal Issues Involved:
The main legal issue involved was the non-payment of the admitted amount due to the contractor despite the work being completed and accepted by the authorities. The UT administration contended that there were insufficient funds and that some of the additional work was not pre-approved, thereby attempting to avoid payment.
In response, Mr. Mohammad Afzal Reshi, represented by Advocate Mr. Lone Altaf (vice Advocate Mr. Irfan Andleeb) and Mr. Shafqat Nazir, approached the court, filing Original Writ Petition (OWP No. 1641/2016) seeking the release of his due payments. The petition was allowed by a Single Judge on September 23, 2021, who directed the appellants to clear the outstanding balance with an interest rate of 6% per annum from the due date within two months. As the government failed to comply, a contempt petition (CCP(S) No. 142/2022) was filed, leading to further litigation.
Court’s Decision on Key Issues:
The Division Bench of the High Court, led by Justice Atul Sreedharan, upheld the decision of the Single Judge, condemning the UT’s actions as a misuse of the judicial process intended to harass the respondent contractor. The court observed:
– Quote from the Court: “It pains me to notice that this is not a solitary case of denial of due payments of a contractor who has successfully executed his work for the Government, but I am confronted with such cases every day… Respondents though admit their liability, but take shelter to the plea that there is paucity of funds. One fails to understand that if the Government department or its agency does not have sufficient funds at its disposal, how could it tender the works and allot them to the contractors.”
The Bench noted that the government had acted with “malice and intent” by filing frivolous litigation to delay payments to the contractor, thereby prolonging his financial hardships.
Key Observations and Directions:
The court made several significant observations, stating that the administrative department’s failure to release funds in a timely manner is unjustifiable. It further noted that the respondent’s entitlements were clear and undisputed, rendering the government’s actions indefensible:
– Quote from the Court: “The filing of the present Letters Patent Appeal is motivated by malice and intent to deprive and harass the respondent herein further from receiving his rightful dues.”
In light of these observations, the court directed the UT administration to:
1. Pay the outstanding balance of ₹20.97 lakhs along with 6% interest from the due date.
2. Impose an exemplary cost of ₹9 lakhs on the appellants for their delay tactics, to be recovered from the salaries of the responsible officers.
3. Ensure that the payment is made to the legal heirs of Mr. Reshi, who unfortunately passed away on July 5, 2024, without receiving his due payments.
The court also reiterated the directions passed by the Single Judge, instructing the Chief Secretary of the Union Territory to take immediate steps to prevent such future occurrences. A high-powered committee was also suggested to promptly examine and settle all genuine contractor claims.
Representation and Parties Involved:
– Appellant(s): Union Territory of Jammu & Kashmir, represented by Mr. Mubeen Wani, Deputy Advocate General.
– Respondent(s): Mohammad Afzal Reshi, represented by Mr. Lone Altaf (vice Advocate Mr. Irfan Andleeb) and Mr. Shafqat Nazir.
