Court says departmental lapses cannot be used to deny payment for road work admittedly completed; directs release of dues with 5% simple interest
Patna, Sept. 21, 2026: The Patna High Court has set aside an order of the District Magistrate, Khagaria, which had rejected a contractor’s claim for payment of his final bill and refund of security deposit after completion of a road construction project under the Mukhya Mantri Sahari Vikas Yojana.
Justice Smt. G. Anupama Chakravarthy, hearing Civil Writ Jurisdiction Case No. 9839 of 2018 filed by contractor Navin Kumar, held that the petitioner could not be denied payment for work admittedly executed merely because of procedural, technical, or administrative lapses on the part of departmental authorities.
The petitioner had been awarded the work of constructing a 2.70 km bypass road from Bakhari Bus Stand to Baluahi Bapu Park in Khagaria district for an agreement value of Rs. 1.37 crore. According to the petition, the work was completed within the stipulated 12-month period, measurements were recorded in the Measurement Book, and a final bill of Rs. 13,67,134 was prepared. A further sum of Rs. 6,14,451 had been retained as security deposit.
The dispute reached the High Court earlier in 2015, when the court directed the District Magistrate to examine the contractor’s claim and release the admitted dues within three months. The court had also directed that if the claim was disputed, the petitioner must be heard and a reasoned order passed. It further ordered that admitted dues would carry simple interest at 5% per annum.
Pursuant to that direction, the District Magistrate heard the petitioner and later rejected the claim. The rejection was based on alleged deficiencies in the estimate, Measurement Book, technical approval, and the absence of required supervision by the Superintending Engineer. The State argued that the project, being above Rs. 50 lakh, required supervision at a higher level and that departmental reports had raised doubts about the condition and thickness of the road.
Rejecting these objections, the High Court observed that the record showed the work had been allotted, executed, substantially paid for, and finally measured. The court noted that the respondents did not dispute the execution of the work or the preparation of the final bill. Importantly, no specific finding was recorded that the contractor had failed to perform the work as per the agreement, or that any payment had been claimed for unexecuted work.
The court held that the reasons cited by the District Magistrate were essentially departmental lapses relating to supervision and record-keeping, and such omissions could not be used to deprive the contractor of payment for work already done. The impugned order was therefore quashed.
The High Court ruled that the petitioner is entitled to release of the amount found due towards the final bill and security deposit in accordance with the departmental records and the terms of the agreement. It also reaffirmed that the amount would carry simple interest at 5% per annum, as directed in the earlier order.
With this finding, the writ petition was allowed.
Bottom Line :
Contractor cannot be denied payment of final bill and refund of security deposit for work admittedly executed, merely because of procedural, technical or administrative lapses on the part of departmental authorities; admitted dues are payable with 5% simple interest as earlier directed by Court.
Statutory provision(s):
Article 226 of the Constitution of India
Navin Kumar v. State of Bihar, (Patna) : Law Finder Doc id # 2987138
