HC orders Jal Shakti Deptt to clear contractor's Rs 7.71 Lakh dues within four weeks

10/02/2026

JAMMU, Feb 9: In a significant judgment strengthening the principle of financial accountability of Government departments, the High Court of Jammu & Kashmir and Ladakh has directed the Union Territory administration and the Jal Shakti (PHE) Department to release an admitted liability of Rs 7,71,224 in favour of a contractor within four weeks, holding that the State cannot deny payment after obtaining the benefit of completed works on the pretext of internal codal lapses.
The ruling was delivered by Mr Justice Wasim Sadiq Nargal while allowing WP(C) No. 73/2024, titled M/s Krishna Engineering Works v. UT of J&K & Ors, pronounced on 06.02.2026.
The petition was filed by M/s Krishna Engineering Works, Industrial Estate Digiana, Jammu, through its proprietor Ajay Kumar, represented by Mr Pawan Choudhary, Advocate. The respondents, including the UT of J&K through the Financial Commissioner and senior officials of the Jal Shakti Department, were represented by Mrs Monika Kohli, Senior Additional Advocate General.
The petitioner firm, engaged in electrical and mechanical works including rewinding of motors, repair of pumps, transformers and generator sets, submitted that between 2015 and 2020, respondent authorities had issued several job orders for execution of works under the Jal Shakti (PHE) Division, Akhnoor.
After completing the allotted works within the stipulated time and in accordance with the terms of the job orders, the petitioner raised bills amounting to Rs 7,71,224. It was further submitted that the bills were duly verified by the concerned Assistant Executive Engineer, thereby establishing that the liability was admitted by the department.
Despite repeated requests and the fact that the works were completed to the satisfaction of the department, the payment remained withheld for years, forcing the petitioner to approach the High Court seeking mandamus for release of the pending amount along with interest and compensation.
The respondents filed a compliance report stating that pursuant to earlier directions of the Court dated 23.01.2024, the petitioner's case was considered and rejected through a speaking order dated 25.11.2024.
The department sought to justify non-payment by alleging absence of codal formalities such as:
" e-tendering procedures
" accord of administrative approval
" grant of technical sanction
The respondents argued that these mandatory requirements under the financial code were not fulfilled, and therefore payment could not be processed.
Justice Nargal, after hearing both sides, rejected the department's stand and observed that contractors execute works on the belief that codal requirements are the responsibility of the Government authorities.
"The persons who execute the work… do so with a belief that all the codal formalities would be taken care of by the respondent-Authority… The respondents, however, after getting the work done are denying the same to the petitioner on the pretext of codal formalities which has no connection with the petitioner," the Court observed.
The Court expressed surprise that the same authority which issued job orders was later taking refuge behind technical objections after completion of works.
"It appears that the respondents with a view to avoid the payment… have taken the aforesaid plea as a matter of afterthought which is contrary to the record," Justice Nargal said.
The High Court reiterated that the legal position regarding release of admitted contractual dues is well settled. Reliance was placed on Supreme Court judgments including:
" Ramakrishna Construction Co. v. Union of India (2010) 3 SCC 579
" Surya Constructions v. State of U.P. (1986) 3 SCC 247
The Court noted that once work has been executed and liability is admitted, the State cannot arbitrarily withhold payment.
"Contractual payments must not be unduly delayed or withheld by the State without valid reasons," the Court held.
In one of the most important observations, Justice Nargal stressed that each day's delay in releasing payments must be justified by the Government.
"The State cannot have a 'win-win' situation, where it delays payment for years and still discharges only the principal amount, without any consequence or accountability," the Court observed.
The Court further held that delay attributable to the State may also entitle the contractor to interest and compensation for financial distress.
The judgment also relied on earlier rulings of the High Court including M/s Saint Solider Engineer and Contractor Pvt Ltd v. UT of J&K (decided 26.09.2025) and M/s Tech Build & Associate v. UT of J&K (decided 09.05.2025).
The Court reiterated that once work is executed, departments cannot raise post-facto objections regarding approvals or sanction of funds.
"Execution of work gives rise to a corresponding obligation upon the State to honour its financial commitments… After the execution of the contract, no post facto objection can be raised to deny or delay payment," the Court noted.
The Court also highlighted the principle of estoppel:
"The respondents having admitted the liability, are estopped under law from questioning the contract at this belated stage," Justice Nargal observed.
Allowing the writ petition, the High Court directed the respondents to release the admitted liability of Rs 7,71,224 in favour of the petitioner within four weeks.
The Court further ordered that if payment is not made within the stipulated period, the petitioner shall be entitled to interest @6 per cent from the date the amount became due.
The petition was accordingly disposed of along with connected applications.
The ruling is expected to serve as an important precedent against the growing practice of Government departments delaying contractors' payments even after completion and utilisation of works. The Court's emphasis on fairness, accountability and timely release of admitted dues reinforces the obligation of a welfare State to ensure economic justice and prevent financial hardship to contractors.

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